CANADA FX DEBT-C$ surges as greenback battered by Fed statement

(Updates throughout with comments, closing figures and details)
    * Canadian dollar ends at C$1.2570, or 79.55 U.S. cents
    * Makes biggest one-day move since September 2011
    * Early in session, C$ touched weakest since March 2009
    * Bond prices mostly higher

    By Solarina Ho
    TORONTO, March 18 (Reuters) - The Canadian dollar rebounded
from six-year lows against the greenback on Wednesday, making
its biggest one-day move against the U.S. dollar since September
2011, after the Federal Reserve signaled a more cautious outlook
for U.S. economic growth and slashed its projected interest rate
    The Fed removed the word "patient" from its language on
interest-rate increases even though its more dovish forecast
appeared to make a June rate hike less likely. It also
acknowledged that inflation was running below expectations,
weighed down in part by falling energy prices. 
    The statement hammered the U.S. dollar. 
    "The Fed's economic forecast is not necessarily negative,
but isn't quite as optimistic as we were seeing back in
December's meeting," said USForex currency strategist Lennon
Sweeting, who is not expecting rate increase until at least the
fourth quarter and said even a prediction of a September hike
would be aggressive.
    "U.S. dollar strength remains intact. This is just a bump in
road," Sweeting said. "Central banks have obviously been
sparking a lot volatility in the market and this is just another
example of that."
    The Canadian dollar, which had already begun
strengthening notably ahead of the Fed statement, finished some
2 percent higher at C$1.2570 against the greenback, or 79.55
U.S. cents. It had closed at C$1.2785, or 78.22 U.S. cents, on
    Currency strategists said the greenback's drop was a good
opportunity for U.S. dollar buyers to add to their positions.
    Earlier in the session, the Canadian dollar had touched
C$1.2835, or 77.91 U.S. cents, its weakest level since March
2009, after data showed Canadian wholesale sales had the biggest
drop in six years in January, a fall that far exceeded
economists' expectations. 
    Canadian government bond prices were mostly higher across
the maturity curve, with the two-year up 9.5 Canadian
cents to yield 0.489 percent and the benchmark 10-year
 climbing 92 Canadian cents to yield 1.319 percent.

 (Reporting by Solarina Ho; Editing by Peter Galloway)