The Canadian dollar weakened against all G10 currencies on Friday after domestic data showed an unexpected decline in employment, prompting investors to scale back bets on further interest rate hikes by the Bank of Canada this year.

The Canadian dollar, known as the loonie, fell 0.2% to 1.3690 against the US dollar, or 72.99 US cents, after touching its weakest level since April 29 at 1.3710 during the session. It was the only G10 currency to post losses against the US dollar.

On a weekly basis, the Canadian dollar declined 0.7% after four consecutive weeks of gains.

Data showed that the Canadian economy lost 17,700 jobs during April, while the unemployment rate rose to a six-month high of 6.9%, signaling continued weakness in the labor market amid pressure from trade uncertainty. Analysts had expected the economy to add 15,000 jobs.

Karl Schamotta, chief market strategist at Corpay, said in a note: The Canadian dollar is weakening as traders reduce expectations for monetary policy tightening that had previously been priced into interest rate curves, while yield differentials continue to favor the US dollar.

He added: We believe signs of stabilization will emerge over the coming months as trade uncertainty eases and downside momentum in the housing market begins to slow, but todays data points to a long and difficult road ahead for the Canadian economy.

Investors reduced expectations for Bank of Canada monetary tightening to 38 basis points by December, down from 44 basis points before the data release.

The central bank had indicated last week that it might be forced to implement consecutive interest rate increases if elevated oil prices continue pushing inflation higher.

Meanwhile, US employment data showed continued strength in the labor market, reinforcing expectations that the Federal Reserve will keep interest rates unchanged for some time.

Oil prices rose 0.9% to $95.64 per barrel after renewed clashes near the Strait of Hormuz raised fresh questions about the ceasefire agreement between the United States and Iran. Oil is one of Canadas key exports.

Canadian government bond yields also declined across the yield curve, with the 10-year bond yield falling 4.1 basis points to 3.483%.