HYANNIS, Mass., (Reuters) – A weakened but still  dangerous Hurricane Earl churned toward the Massachusetts coast  yesterday, en route to Canada’s Maritime provinces, after  slapping North Carolina with heavy wind and rain but causing  less damage than feared.

Earl was downgraded to a Category 1 hurricane with  sustained winds down to 75 mph (120 kph) as it swirled up the  eastern seaboard.

The storm is not forecast to make U.S. landfall, but to  pass very near or just east of (Massachusetts’) Cape Cod last night and on the coast of Nova Scotia yesterday, the  National Hurricane Center said.

“Earl continues to slowly weaken,” the National Hurricane  Center said in its latest update. Rain and wind from the outer  bands of the storm are spreading over New York’s Long Island  area and southeastern New England, it said.

The center warned that Earl — though no longer packing the  power of its former ranking as a fearsome Category 4 storm on  the five-step Saffir-Simpson scale — remained a threat.

People from the U.S. mid-Atlantic states to Canada’s  Maritimes braced for impact, while coastal residents further  south breathed a sigh of relief.

“For the most part, it appears we have dodged a bullet,”  North Carolina Governor Bev Perdue said.

Minimal damage was reported other than beach erosion from  fierce waves on North Carolina’s Outer Banks low-lying barrier  islands. Flooding up to 3 feet (1 meter) was reported in at  least one island village, along with scattered power outages.