* C$ at C$0.9996 to US$, or $1.0004, after hitting parity * Moody's eyes Canadian bank downgrades * Hurricane Sandy likely to limit FX volume By Alastair Sharp TORONTO, Oct 29 (Reuters) - The Canadian dollar weakened to parity with its U.S. counterpart on Monday for the first time since August, as downbeat corporate earnings hurt the global growth outlook and a massive storm threatened the U.S. East Coast. The currency also took a hit after Moody's said on Friday it was reviewing five top Canadian banks for possible rating downgrades due to concerns about a softening economy and volatile capital markets. The move was supported by broader strength in the U.S. dollar, and was expected to continue beyond the psychological barrier. "We should see some decent buying interest above parity, but this is just on the back of a more general (U.S.) dollar move," said Elsa Lignos, a London-based currency strategist at Royal Bank of Canada. At 8:20 a.m. (1220 GMT) the Canadian dollar was trading at C$0.9996 to the greenback, or $1.0004, compared with C$0.9980, or $1.0020, at Friday's North American close. Earlier Monday, the Canadian dollar traded at equal value with the U.S. dollar. Hurricane Sandy forced New York and other cities to close their public transport systems and schools and order mass evacuations. All U.S. stock markets were closed on Monday and may also be shut on Tuesday. Volumes in the foreign exchange market were also expected to be light. Canadian government debt outperformed its U.S. equivalent in all but the 30-year tenure, with the two-year bond up 4 Canadian cents to yield 1.101 percent, and the benchmark 10-year bond adding 28 Canadian cents to yield 1.808 percent.