10/17/2011 08:36 EDT | Updated 12/17/2011 05:12 EST

Canadian dollar backs off, Germany tamps down eurozone summit expectations

TORONTO - The Canadian dollar fell more than a full cent Monday as the U.S. dollar gained strength after Germany moved to temper hopes that a comprehensive plan for solving Europe's government debt crisis will be hammered out by this weekend.

Falling commodity prices also helped push the loonie down 1.12 cents to 97.84 cents US.

Over the weekend, finance ministers from the Group of 20 leading industrial and developing nations reiterated their belief that Europe, in particular Germany and France, are thrashing out a comprehensive plan to stabilize the debt crisis.

Traders hoped that a program would be finalized at a European Union summit which concludes on Sunday, and then presented the following week at the G20 summit.

But on Monday, German Chancellor Angela Merkel's spokesman, Steffan Seibert, said the EU meeting is only an "important step" on a long road.

Seibert observed that Merkel was saying that renewed dreams of having everything solved and done with next month "will again not be fulfilled."

Markets have been intensely volatile for weeks because the European government debt crisis threatens to inflict severe damage on the financial sector and send the global economy back into recession.

Commodity prices were lower with the November crude contract on the New York Mercantile Exchange down 42 cents to US$86.38 a barrel.

The December copper contract slipped three cents to US$3.38 a pound while the December gold contract lost $6.40 to US$1,676.60 an ounce.