* C$ ends at C$1.0221 vs US$, or 97.84 U.S. cents
* German finance minister comments send stocks, euro lower
* Bond prices rise
By Andrea Hopkins
TORONTO, Oct 17 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday as worries about the euro zone debt crisis dominated and investors returned to safer investments, driving North American and European stocks lower.
The decline in stocks, the euro, and commodity-linked currencies including the Canadian dollar came after an upbeat week last week, when hopes were raised that next Sunday's summit of European leaders would resolve the crisis.
Canada's currency fell more than one U.S. cent, while world stocks, as measured by the MSCI's all-country world equity index .MIWD00000PUS, fell 1 percent. On Wall Street, the major stock indexes slid about 2 percent, while Toronto's main index was down 1.3 percent. [MKTS/GLOB]
"It was generally a risk-off move, with the Canadian dollar steadily deteriorating through the day, coincident with a rally in bonds and weakness in equities," said Mark Chandler, head of Canadian fixed income and currency strategy at Royal Bank of Canada.
The Canadian dollar CAD=D3 ended the North American session at C$1.0221 against the U.S. dollar, or 97.84 U.S. cents, down from Friday's close of C$1.0105 to the U.S. dollar, or 98.96 U.S. cents. The currency gained 2.7 percent last week as global markets turned bullish.
Chandler said the Canadian dollar did get a slight push from a Bank of Canada business survey that showed business sentiment remained positive across all indicators, suggesting there will be no recession, but no spectacular growth, either.
Spooked by the shaky global economic outlook, Canadian businesses have downgraded their expectations for sales, hiring and investment but remain mildly optimistic that modest growth will continue, the Bank of Canada's autumn business outlook survey showed. [ID:nN1E79G0Z2]
Chandler said markets will focus on a speech in Boston on Tuesday by U.S. Federal Reserve Chairman Ben Bernanke and on the release of the Fed's Beige Book on Wednesday. Canadian inflation data is due out Friday.
With euro-zone woes as a backdrop all week ahead of the Oct. 23 summit of European leaders, Chandler said the Canadian dollar will likely be under pressure in the next few sessions.
"A move to C$1.03 would put us back to early last week, and that seems easily achievable given the hurdles faced on the policy side," he said.
A Group of 20 meeting of finance ministers in Paris this past weekend had raised expectations that European banks would be recapitalized and the region's bailout fund expanded to deal with a potential debt default by Greece.
But Germany's finance minister, Wolfgang Schaeuble, said on Monday that even though European governments would adopt a five-point platform to address the two-year-old debt crisis, a definitive solution would not be reached at the EU summit. For details, see [nL5E7LH1GL]
Canadian bond prices were higher across the curve with the risk-off mood. The two-year Canadian government bond CA2YT=RR rose 19 Canadian cents to yield 1.003 percent, while the 10-year bond CA10YT=RR climbed 97 Canadian cents to yield 2.294 percent. (Editing by Peter Galloway)