The Canadian dollar weakened to a one-week low against its U.S. counterpart on Friday after a pickup in U.S. wage growth boosted the greenback, while higher bond yields weighed on global stock markets.

At 9:52 a.m. ET, the Canadian dollar was trading 0.9 per cent lower at $1.2383 to the greenback, or 80.76 U.S. cents. The currency's strongest level of the session was $1.2256, while it touched its weakest since Jan. 26 at $1.2385.

On Wednesday, the loonie touched its strongest level in four months at $1.2250. U.S. job growth surged in January and wages posted their largest annual gain in more than 8-1/2 years. The data helped push the U.S. dollar higher against a basket of major currencies as expectations rose that the Federal Reserve will raise interest rates as soon as March.

"I think the Fed is going to go in March," said Christian Lawrence, senior market strategist at Rabobank. "Potentially we could see more members essentially calling for four rate hikes this year."

Global stocks fell, pressured by prospects of higher inflation and climbing bond yields. Canada's commodity-linked currency tends to weaken when risk appetite fades. U.S. crude prices were down 1.1 per cent at US$65.05 a barrel.

Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year bond dipped 2.5 cents to yield 1.873 per cent and the 10-year bond declined 15 cents to yield 2.384 per cent. The 10-year bond yield touched its highest intraday level since May 2014 at 2.389 per cent.

The Canadian dollar is ditching its close shadowing of yield spreads, clearing the way for other metrics to drive the currency, as interest rate hike cycles in North America become more established and investors bet on a weaker greenback.