CANADA FX DEBT-C$ tugged lower by data, Europe caution

Wed Feb 22, 2012 4:31pm EST
 
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* C$ ends at C$1.0004 vs US$, or 99.96 U.S. cents

* European, China PMI data set tone

* Bonds prices edge higher

By Jennifer Kwan

TORONTO, Feb 22 (Reuters) - Canada's dollar sank against its U.S counterpart on Wednesday as weak European and Chinese economic data sapped investor appetite for riskier assets, while worries about Greece continued to infuse an element of uncertainty.

Concerns revolved around the health of the euro zone economy as data showed the services sector shrank this month along with manufacturing. The weakness was echoed in China, where data showed export orders fell in their worst performance in eight months.

As well, persistent worries that Greece will struggle to meet the demands of its new bailout deal added to the uncertain tone for global shares.

"Events in Europe are still largely the primary driver of concern, the primary driver of risk sentiment," said Mazen Issa, macro strategist at TD Securities.

"Most specifically, it seems to be most strongly correlated with the S&P 500."   Continued...