* C$ falls to overnight low of C$1.0535 to the US$
* Bond prices pinned lower across the curve
By Frank Pingue
TORONTO, Oct 23 (Reuters) - The Canadian dollar fell versus the U.S. greenback on Friday as another warning from the Bank of Canada in the previous session that the currency's rally is a risk to growth continued to weigh on sentiment.
The central bank said earlier this week a surging Canadian currency was undermining Canada's economic recovery, which killed thoughts of an early interest rate hike and raised some concerns the bank might signal it would intervene in foreign exchange markets.
On Thursday, Governor Mark Carney said in a news conference that intervention in currency markets was an option but also stressed the bank's main concern was controlling inflation. [ID:nN22502163]
The comments sent Canada's dollar to a slightly lower close on Thursday, and the sentiment carried on through the overnight session where the currency fell as low as C$1.0535 to the U.S. dollar, or 94.92 U.S. cents.
"It's definitely underperforming against most of the crosses," said David Bradley, director of foreign exchange trading at Scotia Capital in Toronto. "Just a follow through from the comments made by Carney and the Bank of Canada over the last couple of days."
Bradley also said the Canadian dollar would have to rally through its 2007 high when it topped US$1.10 to convince the Bank of Canada to intervene.
At 7:40 a.m. (1140 GMT), the Canadian unit was at C$1.0530 to the U.S. dollar, or 94.97 U.S. cents, down from C$1.0478 to the U.S. dollar, or 95.44 U.S. cents, at Thursday's close.
Domestic bond prices, with no Canadian data to influence a move, were pinned lower across the curve alongside the bigger U.S. Treasury as overseas equities rallied and sapped demand for more secure government debt. (Editing by Padraic Cassidy)
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