* C$ finishes at C$1.0661 to U.S. dollar
* Bank of Canada Governor Carney's comments help lift C$
* Bond prices higher across curve (Updates to close, adds quote)
By Jennifer Kwan
TORONTO, Oct 27 (Reuters) - Canada's dollar edged higher against the U.S. currency on Tuesday as the market took comments by Bank of Canada Governor Mark Carney as signaling there is less risk that the central bank will intervene directly to tame the currency's rise.
The currency climbed as high as C$1.0627 to the U.S. dollar, or 94.10 U.S. cents, reversing course after hitting a three-week low overnight on the lingering impact of last week's warning by the Bank of Canada about the dangers that a high-value Canadian dollar presents to economic growth.
But Carney, appearing before the House of Commons finance committee on Tuesday, appeared to temper some of the bank's comments about an appreciating currency, said Firas Askari, head of foreign exchange trading at BMO Capital Markets.
"The one comment that stands out for me is he said the ramifications of a stronger Canadian dollar can have both positive and negative aspects. That's taken as a little more neutral," Askari said.
As well, Carney said on Tuesday that the central is happy with its current policy stance, signaling he did not expect to have to take special steps to tame the Canadian dollar and boost economic recovery. [ID:nN27254408]
"The fact that he basically said that direct intervention could only be used in addition to other tools says the likelihood of a purely FX intervention is unlikely," Askari said.
Shaun Osborne, chief currency strategist at TD Securities, said Carney's comments were a key driver behind the currency's consolidation.
"I think the fact that there appears to be somewhat less risk of direct intervention in markets now has perhaps allowed the Canadian dollar to pick up a little bit of ground against the U.S. dollar," he said.
The currency finished at C$1.0661 to the U.S. dollar, or 93.80 U.S. cents, slightly higher than C$1.0670 to the U.S. dollar, or 93.72 U.S. cents, at Monday's close.
A fairly steady commodity backdrop helped the currency hang on to gains. [O/R] [GOL/] Commodity prices often influence the Canadian dollar's direction because commodities make up a large portion of Canada's exports.
BONDS HIGHER
Canadian bond prices were higher across the curve alongside the bigger U.S. Treasury market following a relatively successful U.S. two-year note auction, said Mark Chandler, fixed income strategist at RBC Capital Markets. [US/]
"There was some trepidation about how well the relatively hefty auctions in the U.S. would be received," he said. He noted that softer U.S. economic data also pressured yields. [US/]
The two-year bond