register now for free unlimited access to reuterscom register a canadian dollar coin commonly known as the loonie is pictured in this illustration picture taken in toronto january 23 2015 reutersmark blinchfile photo toronto sept 16 reuters  the canadian dollar weakened to its lowest level in nearly two years against the greenback on friday and canadas stock market fell more than 1 as investors grew cautious ahead of domestic inflation data and a federal reserve interest rate decision next week the canadian dollar was trading 04 lower at 13285 per us dollar or 7527 us cents after touching its weakest since november 2020 at 13307 for the week the loonie was down 19 its biggest weekly decline since august 2021 it follows hotterthanexpected us inflation data on tuesday that spooked financial markets globally and pushed the us dollar sharply higher against a basket of major currencies the dollar is an unstoppable juggernaut right now with higherthanexpected inflation and an evermorehawkish federal reserve sucking capital into the united states and inflicting damage on the rest of the world economy said karl schamotta chief market strategist at corpay money markets expect the fed to hike interest rates by threequarters of a percentage point next wednesday the world bank said on thursday that the global economy might be inching toward a recession read more canada is a major exporter of commodities including oil so the loonie tends to be particularly sensitive to the global economic outlook in a possible signal that investors expect a recession the inversion of canadas yield curve grew larger the 10year yield fell 68 basis points below the 2year yield after the latter touched its highest intraday level since december 2007 at 3870 canadas inflation data for august is due next tuesday with all eyes on measures of underlying price pressures market participants burnt by tuesdays us datasurprise  are bracing themselves for a range of outcomes schamotta said the cautious mood spilled over to the stock market with both wall street and the toronto stock market trading lower the markets are in a bit of a riskoff mode said greg taylor a portfolio manager at purpose investments the really big fear is that were going to start to see some earnings warnings from companies as the economy starts to slow down the toronto stock exchanges sptsx composite index gsptse was down 12 at 1932670 including declines for technology energy and financial shares for the week the index was on track to lose 23 reporting by fergal smith aniruddha ghosh and johann cherian in bengaluru editing by jonathan oatis