The Canadian dollar weakened past 1.39 per US dollar in late September to a four-month low amid softer domestic data and a firmer US dollar removed the carry case for the loonie. Markets repriced a more aggressive BoC easing path after the Bank cut its policy rate and signalled scope for more easing, which reduced the appeal of CAD fixed income. At the same time August headline CPI stood at 1.9% and core measures broadly held steady, giving the BoC room to ease and lowering the incentive for foreign capital to stay. A preliminary retail estimate pointing to roughly a 1.0% rebound in August provided some support but was not enough to reverse expectations of further rate relief. Governor Macklem’s recent comments that tariff shocks and weak productivity weigh on growth reinforced the view that policy must balance slowing momentum with inflation dynamics. Finally the US dollar strengthened after Fed commentary that highlighted two sided risks to inflation and the labour market.