* C$ ends higher at C$1.0354 vs US$, or 96.58 U.S. cents,
* Global equities rally after recent selloff
* Bond prices lower across the curve (Updates to close, adds comments)
By Jennifer Kwan
TORONTO, Nov 28 (Reuters) - The Canadian dollar rebounded on Monday from seven-week lows against its U.S. counterpart, finishing higher on investor optimism that European leaders would make progress on resolving the euro zone's debt crisis.
Canada's dollar rose to a high of C$1.0304 to the U.S. dollar, or 97.05 U.S. cents, in tandem with world stocks and commodity prices. [MKTS/GLOB] [O/R]
Key factors behind the rise included a report that suggested the International Monetary Fund was preparing a rescue plan for Italy, although an IMF spokesperson denied the report. [ID:nL4E7MS1BN].
As well, Germany and France pushed to acquire powers to reject national budgets in the euro zone that would breach European Union rules, ahead of an EU summit on Dec. 9. [ID:nL5E7MS22H] [ID:nN1E7AR0MR]
"It was all about renewed risk appetite on the back of the developments that came out of Europe. There was some optimism they may be fixing the situation," said Matt Perrier, director of foreign exchange sales at BMO Capital Markets.
"That gave equities and risk appetite a lift across the board, and North America followed suit as we walked in, so a strong performance by equities, commodities and commodity-based currencies."
The Canadian dollar CAD=D4 ended at C$1.0354 to the U.S. dollar, or 96.58 U.S. cents, up sharply from Friday's finish at C$1.0494 or 95.29 U.S. cents.
Camilla Sutton, chief currency strategist at Scotia Capital, said the market was experiencing a "massive retracement" from last week across currencies.
The Canadian dollar touched a low of C$1.0524 against the greenback, or 95.02 U.S. cents, on Friday, its weakest level since Oct. 5.
"The culmination of strong Black Friday (retail) sales in the U.S. combined with the hope that Europe is coming towards a new plan is temporarily providing some relief to markets," said Sutton.
Black Friday typically marks the beginning of the U.S. holiday shopping season, following the Thursday Thanksgiving holiday.
Stronger prices for oil and gold also helped to lift the Canadian dollar. [O/R] [GOL/]
After clawing back from the C$1.05 levels breached on Friday, Sutton said the next significant resistance levels for the Canadian dollar are seen at C$1.0280-C$1.0380 against the U.S. currency.
Canadian government bond prices were lower across the curve, following the broader trend in the United States that saw stocks finish sharply higher. [US/]
"There's a bit of a risk-on tone and we're more inclined to be investing in equities and other risky assets, including commodities," said David Tulk, chief Canada macro strategist at TD Securities.
"As a consequence people are moving out of fixed income, which has pushed prices down and yields higher."
The two-year bond CA2YT=RR eased 4 Canadian cents to yield 0.974 percent, while the 10-year bond CA10YT=RR sank 10 Canadian cents to yield 2.123 percent.