TORONTO, Ontario: The Canadian dollar traded near an eight-week low against the U.S. dollar on Friday as investors looked ahead to domestic employment data that could influence expectations for next week's Bank of Canada interest rate decision.

The loonie weakened to 1.3938 per U.S. dollar, or 71.75 U.S. cents, around the close on Friday, its lowest close level in two months.

Analysts said concerns about Canada's economic outlook and ongoing trade uncertainty continue to weigh on the currency.

"Weak domestic fundamentals and lingering trade uncertainty mean that the CAD is not master of its own destiny at the moment," Shaun Osborne and Eric Theoret, strategists at Scotiabank, said in a note.

"External developments will remain a strong influence on price action."

The currency came under additional pressure from falling oil prices. Crude oil, one of Canada's most important exports, declined 3.8 percent to $92.41 per barrel as investors grew hopeful that the conflict involving the United States, Israel and Iran could move toward a resolution.

A potential end to hostilities could lead to the reopening of the Strait of Hormuz, a critical shipping route for global energy supplies.

The U.S. dollar continued strengthening against a basket of major currencies Friday.

Despite recent weakness, a Reuters poll indicated that the Canadian dollar could strengthen over the next year if the domestic economy improves and progress is made in the review of the North American trade agreement.

Market pricing currently suggests investors expect the central bank to leave its benchmark interest rate unchanged at 2.25 percent for a fifth consecutive meeting when policymakers announce their decision next Wednesday.

Meanwhile, Canadian government bond yields rose Friday alongside U.S. Treasury yields.

The yield on Canada's 10-year government bond is currently trading around 3.50 percent.