* C$ ends lower at 93.01 U.S. cents
* Falling oil the main driver after brief Fed boost
* Fed says U.S. economy in recovery after downturn
* Bonds turn higher as stocks suffer late-session slump (Updates to close)
By Ka Yan Ng
TORONTO, Sept 23 (Reuters) - Canada's currency finished lower against the U.S. dollar on Wednesday, pulled down by falling energy prices, despite getting a brief boost after the Federal Reserve said U.S. economic recovery is under way.
The U.S. central bank's statement that the economy is in recovery [ID:nN23390829] prompted a swift slide in the greenback against a number of currencies, including the Canadian dollar, as it spurred investor confidence in holding riskier currencies.
But it wasn't long before the oil price reasserted its strong influence on the Canadian dollar's direction. Oil fell more than $3 to below $69 a barrel on U.S. storage data, and carried Toronto's main stock market index lower along with it. The Canadian dollar often tracks the direction of equity and resource prices as a reflection of risk appetite.
The Canadian currency finished at C$1.0751 to the U.S. dollar, or 93.01 U.S. cents, down from C$1.0691 to the U.S. dollar, or 93.54 U.S. cents, at Tuesday's close. It nearly matched its overnight high of 93.78 U.S. cents after the Fed statement.
"It seems to have been short-lived with the Canadian dollar retracing those initial gains," said Paul Ferley, assistant chief economist at Royal Bank of Canada. "We're seeing a pretty good drop in terms of oil prices and commodity prices and that seems to be grabbing the lion's share of attention right now."
Early in the session, Canada's currency turned lower against the U.S. dollar after a Bank of Canada official repeated the central bank's warning that the strong Canadian dollar is a risk to growth. [ID:nN23387254]
Separately, Bank of Canada Governor Mark Carney said late on Tuesday that Canada's economy has started the slow climb to recovery but only because of the emergency measures taken by the government and central bank, with business activity still lagging. [ID:nN22355648]
After the Fed, the focus turns to a meeting of the Group of 20 nations on Thursday in Pittsburgh. Among major issues expected to be discussed will be the need to examine strategies for withdrawing economic stimulus measures. [ID:nLH78576]
BONDS PUSH HIGHER
Canadian bond prices turned higher late in the session as stock markets dropped sharply in the closing moments of trading. Bonds had been trading near flat after the Fed reiterated its promise to keep interest rates low for an extended period. [ID:nN23409345]
The two-year bond CA2YT=RR gained 2 Canadian cents to C$99.48 to yield 1.273 percent, while the 10-year bond CA10YT=RR rose 7 Canadian cents to C$102.75 to yield 3.413 percent. The 30-year bond CA30YT=RR gained 35 Canadian cents to C$118.10 to yield 3.922 percent.
Canadian bonds outperformed their U.S. counterparts on the front and back ends of the curve, but the five- and 10-year maturities underperformed. (Reporting by Ka Yan Ng; editing by Peter Galloway)