CANADA FX DEBT-C$ firms slightly as Fed move weighed

* C$ at C$1.0216 vs US$ or 97.89 U.S. cents
    * Fed remains primary focus after holds purchases steady
    * Canadian bond prices mixed

    By Leah Schnurr
    TORONTO, Sept 19 (Reuters) - The Canadian dollar firmed
modestly against the greenback on Thursday as investors
reassessed their expectations for how long the Federal Reserve
will keep its stimulus in place the day after the Fed held
policy steady, defying market expectations.
    The U.S. central bank maintained its $85 billion a month in
bond purchases in a decision on Wednesday, surprising investors
who had largely expected a small reduction of about $10 billion.
    The central bank also cut its projections for economic
growth for both this year and next.
    The surprise move saw the U.S. dollar hovering around
seven-month lows on Thursday, and the Canadian dollar strengthen
to as much as C$1.0182 in early trading, a fresh three-month
    But with the United States as Canada's biggest trading
partner, the lower economic forecast could dampen some investor
enthusiasm for the loonie. 
    "The flip side for the Canadian dollar is that our economic
recovery is highly tied to the U.S., so a more downbeat forecast
on future economic growth from the Fed isn't really a good thing
for the Canadian economy," said Scott Smith, senior market
analyst at Cambridge Mercantile Group in Calgary.
    "We're in this range where investors and traders are really
trying to decipher whether or not this gives us impetus to take
another leg lower from here or if we have to stand back and
reassess the situation."
    The Canadian dollar firmed to C$1.0216 to the U.S.
dollar, or 97.89 U.S. cents, stronger than Wednesday's session
close of C$1.0222, or 97.83 U.S. cents. 
    Reaction to Thursday's domestic economic data was muted as a
stronger-than-expected 1.5 percent rise in wholesale trade in
July was offset by a downward revision to the previous month's
    Prices for Canadian government bonds were mixed across the
maturity curve, with the two-year bond up 3 Canadian
cents to yield 1.249 percent, and the benchmark 10-year bond
 rising 2 Canadian cents to yield 2.683 percent.