* C$ ends at C$1.0042 vs US$, or 99.58 U.S. cents * Equity markets rally as euro zone debt fears ease * C$ closely linked to US$ * Canadian bond prices fall By Jon Cook TORONTO, April 11 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Wednesday, failing to rise with other commodity-linked currencies as equity markets rebounded after concerns eased about an escalation of Europe's debt crisis. The euro firmed against the U.S. dollar after remarks from an European Central Bank policymaker raised the possibility of more bond-buying and Spanish and Italian bond yields fell. Canada's resource-heavy currency normally tracks riskier equities, but its fate has become increasingly intertwined with the U.S. dollar as economic conditions in Europe deteriorated late last year and investors focused on a "buy North America" theme, said Greg Moore, a foreign exchange strategist at TD Securities. "The Canadian dollar is a bit of an outlier in today's session," he said. "You have most other risk currencies benefiting quite a bit from higher equities and tighter euro zone sovereign spreads, but the Canadian dollar is still connected at the hip with the U.S. dollar." The Canadian dollar finished at C$1.0042 versus the U.S. dollar, or 99.58 U.S. cents, nearly unchanged from Tuesday's North American close at C$1.0041 versus the U.S. dollar, or 99.59 U.S. cents. It briefly touched its lowest level since January at C$1.0053. Moore said a close above that level could signal a further weakening of the Canadian dollar and possibly push it out of the tight range it's hovered in near parity with the greenback since January. The Canadian and U.S. currencies have weakened since disappointing growth in U.S. jobs creation in March reported last week, raising doubts about the strength of the American economic recovery. "If we continue to get positive data from the U.S. then Canada will outperform and if we don't it will underperform," said Adam Cole, global head of foreign exchange strategy at Royal Bank of Canada in London. Domestically the picture has been brighter, with the Canadian economy adding a stunning 82,000 jobs in March, eight times the 10,000 forecast. Data on Wednesday showed housing starts rose to 215,600 units on a seasonally adjusted annualized basis in March. The numbers have economists predicting the Bank of Canada may raise its key lending rate, above its current 1 percent level, well ahead of the U.S. Federal Reserve, which has said it intends to keep rates near zero until late 2014. The median forecast in a Reuters poll of 40 economists and strategists released on Wednesday predicted the Bank of Canada's next interest rate hike will not come until the second quarter of 2013. None of the respondents saw a change in rates at the next Bank of Canada policy announcement date, April 17. Wednesday's improved risk sentiment pushed down Canadian government bond prices. Canada's two-year bond fell 6 Canadian cents to yield 1.221 percent, while the 10-year bond dropped 26 Canadian cents to yield 2.014 percent.