* C$ at 0.9873 vs US$, or $1.0129 * C$ lowest since May 1 against euro * Bonds weaker across curve By Solarina Ho TORONTO, Dec 19 (Reuters) - The Canadian dollar was weaker against its U.S. counterpart on Wednesday, trending with other commodity currencies, as many investors looked to book profits ahead of the holidays following a recent rally to two-month highs. Canada's dollar ran counter to world shares, which hit 17-month highs, and the surging euro. Investor hopes grew for a year-end budget deal in the United States and for further monetary stimulus from the Bank of Japan. "I think this is probably some profit-taking heading into the holidays, because the market was quite short USD/CAD. Definitely some technical levels have broken on some of the Canada crosses ... It's had a very decent rally," said David Bradley, director of foreign exchange trading at Scotiabank. "It's been really strange, the way its traded recently ... Most correlations have broken down." At 9:07 a.m. (1407 GMT), the Canadian dollar stood at C$0.9873 versus the U.S. dollar, or $1.0129, weaker than Tuesday's North American finish at C$0.9857, or $1.0145. Bradley said the currency's strength has stalled around the C$0.9825 level against the U.S. dollar, and noted a lot of interest to sell toward C$0.9882. Against the euro, it fell to its lowest level since May 1 at C$1.3131, or .7616 euros. The currency did not react to a smattering of North American data, including Canadian wholesale trade, which expanded by a stronger-than-expected 0.9 percent in October. Canada was underperforming most major currencies except other commodities-linked currencies and the Japanese yen. It touched its weakest level against the euro since May 1. A key business survey in Germany suggested that Europe's biggest economy was likely to bounce back quickly from its slowdown. The growing confidence in the outlook lifted the euro to a 16-month high against the yen and an 8-1/2 month peak versus the U.S. dollar. Canadian government bond prices were lower across the curve. The two-year bond was down 1 Canadian cent, yielding 1.158 percent, while the benchmark 10-year bond shed 20 Canadian cents to yield 1.862 percent.