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

* C$ ends at C$1.0004 vs US$, or 99.96 U.S. cents

* European, China PMI data set tone

* Bonds prices edge higher

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.”

The currency shrugged off strength in Toronto stocks, which got a big boost from gold prices as technical buying pushed the price of the metal to a three-month high.

The Canadian dollar ended at C$1.0004 versus the U.S. dollar, or 99.96 U.S. cents, slightly off the currency’s finish at C$0.9966, or $1.0034, on Tuesday.

David Watt, senior currency strategist at RBC Capital Markets, said he expects the currency to trade within a range of around C$0.9950 to C$0.9985 versus the greenback.

He said a key technical level to watch is the 200-day moving average around C$0.9985. A sustained and decisive move above or below could set the longer-term trend.

“If you’re below the 200-day moving average, medium term sentiment is Canadian dollar positive. If you’re above the 200-day moving average medium term sentiment is generally U.S. dollar positive,” said Watt.

“When you’re waffling around, it basically indicates the market is unclear.”

Canadian bond prices edged higher in tandem with the big U.S. Treasury market. Bond prices there rose as investors flocked to the safety of government debt on persistent concerns about Greece’s financial health and political tension in Iran and Syria.

Rising oil prices due to ongoing unrest in Syria and failed talks over Iran’s nuclear program also rattled investor confidence.

The two-year bond edged 3 Canadian cents higher to yield 1.099 percent. The 10-year bond climbed 32 Canadian cents to yield 2.052 percent.