CANADA FX DEBT-C$ turns positive, bonds firm after Fed

   * C$ hits day's high and low after Fed statement

 * Fed says prepared to provide additional support

 * Bonds follow U.S. Treasuries higher
 (Adds comments after Fed statement)

 TORONTO, Sept 21 (Reuters) - The Canadian dollar hit its
highest and lowest points of the session against the U.S.
currency on Tuesday after the U.S. Federal Reserve said it
stood ready to help the economy if needed.

 The Fed, which made no shift in monetary policy at the end
of its one-day meeting, as expected, said it was prepared to
provide additional support to bolster a modest economic
recovery, suggesting it may be preparing to do more to keep
unemployment from rising and prices from falling.
[ID:nN20109053]

 The currency briefly dropped to C$1.0332 to the U.S.
dollar, or 96.79 U.S. cents, then turned convincingly higher as
investors exited the greenback, while U.S. stock indexes turned
positive. It jumped as high as C$1.0217 to the U.S. dollar, or
97.88 U.S. cents.

 "The market is diversifying away from the U.S. dollar as
far as a safety holding and we saw immediate evidence of that
with the way that the Dow shot up and interest for the other
currencies took place," said said C.J. Gavsie, managing
director of foreign exchange sales at BMO Capital Markets.

 At 3:25 p.m. (1725 GMT), the currency was at C$1.0261 to
the U.S. dollar, or 97.46 U.S. cents, up from Monday's close at
C$1.0293, or 97.15 U.S. cents.

 BONDS HIGHER

 Government bonds were initially mixed after the statement,
but climbed across the curve to mirror gains in U.S. Treasuries
as the Fed expressed somewhat greater concern about the
sluggish pace of economic growth.

 The U.S. central bank also opened the door wider to pumping
more money into the economy as well as noting that it saw
subdued inflation for "some time."

 The two-year bond was up 9 Canadian cents to yield 1.462
percent, while the 10-year bond gained 21 Canadian cents to
yield 2.920 percent.
 (Reporting by Ka Yan Ng; editing by Rob Wilson)