Stocks on major exchanges plummeted and the euro hit 5-week lows after US jobs data for June came in weaker than expected, fueling concerns that Europe's debt crisis is deepening a slowdown in the US economy.
"I think there is disappointment that we are continuing to see sluggish growth in US employment," said Paul Ferley, assistant chief economist at Royal Bank of Canada, the country's largest bank.
"It certainly argues for the (US) Fed to keep policy very accommodative and it also argues for the Bank of Canada to keep conditions very accommodative."
Canada's job growth slowed in June for a second straight month in a reality check after outsized employment gains earlier this year, firming the markets' view that the central bank won't act soon on recent hints of a rate hike.
"After gaining a lot of jobs in March and April, we're looking at a slightly subdued pace of hiring," said David Tulk, chief Canada macro strategist at TD Securities.
"I think this does speak to some residual momentum in the Canadian economy but perhaps a little bit more caution on the part of firms looking at some of the international headwinds and maybe a sense of domestic fatigue."
The Canadian currency ended at C$1.0186 versus the US dollar, or 98.17 US cents, weaker than Thursday's finish at C$1.0144, or 98.58 US cents.
Immediately after the data came out the Canadian dollar swung to a session high and low as traders digested the twin reports.
Meanwhile, oil and copper prices fell, along with gold. US and German government bond prices leapt, with investors seeking safe havens in US Treasuries and German bunds.
The market move was also dampened as investors remained unimpressed after a trio of major central banks loosened monetary policy in the previous session.
Canadian bond prices edged up across the curve, tracking moves in US Treasuries where debt yields hit a one-month low after the jobs data raised expectations for more easing from the Fed.
Canada's two-year government bond edged up 8 Canadian cents to yield 0.988 percent, while the benchmark 10-year bond added 27 Canadian cents to yield 1.693 percent.