* C$ at C$1.0272 vs US$, or 97.35 U.S. cents * U.S. data offsets sluggish economy * 2-year bond yield at lowest level since July * Reuters poll: Next BoC rate hike Q1 2014 By Solarina Ho TORONTO, Feb 27 (Reuters) - The Canadian dollar softened marginally against its U.S. counterpart on Wednesday as a sluggish domestic economy and recent negative sentiment over worries in Europe tempered positive U.S. economic data. A gauge of planned U.S. business spending increased by the most in just over a year in January and new orders for long-lasting manufactured goods excluding transportation rose solidly, pointing to underlying strength in factory activity. The durable goods categories "were not that weak as much as the headline would suggest," said Don Mikolich, executive director, foreign exchange sales At CIBC World Markets. At 9:26 a.m. (1426 GMT), the Canadian dollar was trading at C$1.0272 versus the greenback, or 97.35 U.S. cents, slightly weaker than Tuesday's North American closed at C$1.0264, or 97.43 U.S. cents. Canada's dollar was underperforming against most other currencies, except for the Australian dollar. Worries that an uncertain outcome from the election in Italy, the euro zone's third-largest economy, will fragment the government and endanger the country's current economic reform program, were soothed following solid demand at an auction of Italian government debt. Mikolich expected the Canadian currency to trade between C$1.0220 and C$1.0310, noting that C$1.0320 is the next key level. On Tuesday, it briefly touched C$1.0304, or 97.05 U.S. cents, its weakest level in about eight months. The Canadian dollar has been under pressure in recent weeks, following a string of unexpectedly weak deta. The numbers have pushed expectations for the Bank of Canada's next interest rate hike all the way to the first quarter of next year, according to a Reuters poll on Wednesday. Traders are now looking ahead to fourth-quarter Canadian GDP data on Friday. Government bond prices were higher across the curve, with the 2-year bond climbed 2.8 Canadian cents to yield 0.996 percent, its weakest level since last July. The benchmark 10-year bond rose 20 Canadian cents to yield 1.838 percent.