The Canadian dollar weakened past 1.375 per US dollar in September after the Bank of Canada cut its policy rate by 25 basis points to 2.5% and signalled a durable easing campaign. The move reflected a sharper slowdown in activity than earlier anticipated, including a 1.6% contraction in second quarter GDP and a 27% collapse in exports. Labour market deterioration reinforced the case for easier policy, with net job losses and unemployment rising to 7.1% in August, which reduced wage pressures and removed urgency from the inflation narrative. Consumption and housing remain relatively resilient, but the Governing Council warned that trade barriers and slowing population growth will gradually weigh on private spending and the labour market. With headline inflation at about 1.9% markets judged that there was room to loosen policy without jeopardising the 2% target.