TORONTO: The Canadian dollar fell against its broadly stronger US counterpart on Friday as investors weighed Canadian employment and US inflation data that supported bets for aggressive interest rate hikes by the Bank of Canada and the Federal Reserve.

The loonie was trading 0.7% lower at 1.2785 to the greenback, or 78.22 US cents, after touching its weakest since May 26 at 1.2787. For the week, it was on track to fall 1.5%, which would be its biggest weekly decline since last August.

The US dollar jumped against a basket of major currencies and equity markets globally tumbled as US consumer prices accelerated in May, suggesting the Fed could continue with its 50 basis point interest rate hikes through September to combat inflation.

Canada’s central bank has also been hiking in half-percentage-point increments.

Money markets see about a 60% chance that it would announce an even larger move at its next policy announcement on July 13 as data showed the Canadian economy adding 40,000 jobs in May, more jobs than expected, and the unemployment rate hitting a record low at 5.1%.