* C$ hits low of C$1.0246 vs US$, or 97.60 U.S. cents * Retail sales edge up 0.4 pct in March * Currency outperforms New Zealand and Australian dollars * Bonds climb across curve; 30-yr yield near record low By Jennifer Kwan TORONTO, May 23 (Reuters) - Canada's dollar edged lower against its U.S. counterpart on Wednesday, dragged down by broader concerns about Europe's financial stability, even as domestic data showed retail sales bounced back in March. Canadian retail sales climbed in March after a February setback, growing 0.4 percent as consumers bought more cars and warm weather prompted them to begin their spring shopping for items such as clothing, sporting goods and garden equipment. The rise was a notch above the 0.3 percent gain forecast by market operators and followed a 0.2 percent decline in February, according to government data. Excluding autos, however, sales were up just 0.1 percent versus a market forecast for a rise of 0.5 percent rise. After the report, the Canadian dollar slipped to a session low of C$1.0246 versus the U.S. currency, or 97.60 U.S. cents, from about C$1.0225 just before the data's release. At around 9:25 a.m. (1425 GMT), the currency was at C$1.0230 versus the U.S. currency, or 97.75 U.S. cents, weaker than Tuesday's North American session finish at C$1.0218. "The retail sales number has had a very fleeting impact," said Greg Moore, a foreign exchange strategist at TD Securities. "The focus remains on Europe for now." Investors shunned riskier assets on doubts that any new measures to tackle the euro zone debt crisis would emerge from a European leaders summit. Lack of market confidence the summit would yield meaningful progress sent the euro to a 21-month low, put an end to a rally in European equities, and sent yields on Spanish and Italian bonds higher. The leaders are expected to discuss boosting growth at their meeting later on Wednesday and the idea of a joint euro zone bond. French President Francois Hollande supports the bond plan, but German Chancellor Angela Merkel opposes it. A key concern will be ways to aid debt-mired Greece, said Moore, who sees the currency trading in a tight range of C$1.0150-C$1.0250 against the greenback. Canada's dollar notched a mixed performance against other G10 currencies, but outperformed some of its commodity-linked peers, reaching 2012 highs against the New Zealand and Australian dollars. Canada's two-year government bond climbed 10 Canadian cents higher to yield 1.164 percent, while the benchmark 10-year bond rose 40 Canadian cents to yield 1.867 percent. The 30-year yield was 2.418 percent, near the record-low level of 2.408 percent reached last week.