* C$ ends down at 92.21 U.S. cents
* Tumbling stock markets, economic worries weigh
* Focus on Friday's U.S. payroll numbers
* Bond prices higher with drop in stocks (Updates to close)
By Frank Pingue and Ka Yan Ng
TORONTO, Oct 1 (Reuters) - The Canadian dollar finished lower versus the greenback on Thursday as slumping equity markets and weak U.S. economic data combined to wipe out gains made earlier in the session.
The turn lower by Canada's dollar came as North American equities tumbled, ending the session off more than 2 percent, after U.S. data showed a weak labor market last week and below-forecast manufacturing sector growth in September.
The weak data increased uncertainty about the nascent economic recovery. [ID:nN01395512] and saw the greenback strengthen on renewed safe-haven appeal.
The Canadian unit closed at C$1.0845 to the U.S. dollar, or 92.21 U.S. cents, down from Wednesday's close at C$1.0707 to the U.S. dollar, or 93.40 U.S. cents.
The data dragged the commodity-linked Canadian unit as low as C$1.0847 to the U.S. dollar, or 92.19 U.S. cents, after it reached as high as C$1.0672 to the U.S. dollar, or 93.70 U.S. cents.
"Equity markets are down and weakening through the day and there is just notable caution today ... with the data that came out and the data that's expected tomorrow," said David Watt, senior currency strategist at RBC Capital Markets.
Friday's U.S. jobs report is expected to draw plenty of attention from currency traders. The report is expected to show the pace of job losses in September slowed from August, but the jobless rate is seen rising. ECONUS
No key Canadian economic data comes out until Tuesday when the Ivey Purchasing Managers Index report for September is due. That will be followed by September housing starts on Thursday and the more important jobs data for September on Friday.
G7 finance ministers and central bank chiefs meeting in Istanbul on Saturday will try to figure out how to put into practice the lofty promises endorsed by G20 leaders last week, a senior Canadian finance official said. [ID:N01263572]
BONDS CRUISE HIGHER
Canadian bonds climbed steadily climbed across the curve on the surprise jump in U.S. weekly jobless claims, while North American stocks slumped and lifted the appeal of more secure assets like government debt.
The first trading session of a new quarter may also have market players assessing the landscape from an economic and technical point of view.
"I think traders tend to step back and take a more objective look at the situation. You could say some of the data this week has disappointed. That momentum that people were looking for in the economic recovery had a bit of a hiccup this week," said Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment.
"I think there is also a bit of caution in the stock markets."
The two-year bond CA2YT=RR ended up 12 Canadian cents at C$99.62 to yield 1.202 percent, while the 10-year bond CA10YT=RR gained 50 Canadian cents to C$104.10 to yield 3.251 percent. The 30-year bond CA30YT=RR climbed 65 Canadian cents to C$120.25 to yield 3.809 percent.
(Editing by Rob Wilson)