* C$ ends higher at 90.65 U.S. cents
* BoC's Mark Carney warns about C$'s rapid rise
* Bonds rally on weak industrial capacity data
By John McCrank
TORONTO, June 11 (Reuters) - The Canadian dollar rose against the U.S. dollar on Thursday on strength in commodities and firmer equities, even as the Bank of Canada repeated warnings that the currency's rapid rise in recent months could hamper economic recovery.
The Canadian dollar ended the session at C$1.1032 to the U.S. dollar, or 90.65 U.S. cents, up from Wednesday's finish at C$1.1080 to the U.S. dollar, or 90.25 U.S. cents.
The currency got a boost from higher U.S. crude prices
Stronger investor sentiment also helped drive up commodity prices in general. The Reuters-Jefferies CRB index <.CRB>, which tracks the futures of raw metals across 19 mostly U.S. markets, rose 2 percent to a seven-month high.[ID:nN11499238]
As Canada is a major exporter of oil and other commodities the currency benefited from the stronger prices, as did the Toronto Stock Exchange, which surged to nearly an eight-month high [ID:nN11498221].
Higher commodity prices and stronger investor confidence have helped the Canadian dollar rise more than 17 percent against the greenback since early March.
That rally prompted Bank of Canada governor Mark Carney to reiterate the central bank's concerns on Thursday about the rapid rise of the currency.
"The currency moved last month at an unprecedented rate," he told reporters in Montreal. "It moved to the extent that, in our judgment, that if it were to persist at those levels, it would offset positive developments that had been seen in financial conditions, in commodity prices, and in confidence."
Matthew Strauss, a senior currency strategist at RBC Capital Markets said Carney's remarks had little impact on the dollar, because the bank's views were already known.
"If you really wanted to read between the lines, you might want to determine there is slightly more concern about the currency, but I wouldn't go that far," he said.
BONDS RALLY
Canadian bond prices were were higher across the curve, partly due to weaker than expected economic data.
Trouble in the auto industry helped slash Canada's industrial capacity use to a record low of 69.3 percent in the first quarter, from 74.9 percent in the fourth quarter of last year.
"The 69.3 percent capacity utilization rate ... speaks to the softness in the manufacturing and the non-manufacturing sectors," said Charmaine Buskas, a senior economics strategist at TD Securities.
"It indicates that factories and businesses across Canada are throttling back on production quite significantly as demand slumps. It's probably a reflection of the overall weakness in the economy and, as a result, we did see bonds rally."
Domestic bond prices were also helped by a rise in U.S. Treasury prices as a solid auction of 30-year debt eased concerns over the ballooning U.S. budget deficit. [ID:nN11208306]
The benchmark two-year government bond was up 8 Canadian cents at C$99.71 to yield 1.400 percent, while the 10-year bond rose 97 Canadian cents to C$101.80 to yield 3.534 percent.
The 30-year bond shot up C$2.00 to C$116.75 to yield 3.999 percent. The comparable U.S. issue yielded 4.6996 percent.
Canadian bonds outperformed U.S. treasuries across the curve. The Canadian 30-year bond was 70.1 basis points below the U.S. 30-year yield, compared with about 66 basis points below on Wednesday. (Editing by Rob Wilson)