* C$ nearly unchanged vs Monday, volatile overseas moves
* Bond prices higher across curve
* U.S. home sales, ISM manufacturing index awaited
TORONTO, Sept 1 (Reuters) - Canada's dollar was little changed on Tuesday while bond prices were slightly higher following mixed European data and ahead of U.S. economic reports set to test the strength of recovery.
The Canadian dollar pared gains as data emerged in Europe. An unexpected dip in U.K. manufacturing activity in August stoked concerns about the pace of recovery in the British economy, while the euro zone purchasing managers' index rose more than expected and German unemployment unexpectedly fell in August. [ID:nL1662667] [ID:nLAG003701] [ID:nLAG003703]
"While it opens the North American session more or less unchanged against the New York close yesterday, there's been a fair amount of intraday volatility in the Asian and European markets," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
Further direction is likely to come from stock markets and U.S. data, which includes U.S. pending home sales and the August reading for the Institute for Supply Management's manufacturing index. Both are due at 10 a.m. (1400 GMT).
Canadian bond prices were slightly higher as North American stock markets pointed to a lower open due to ongoing concerns over the strength of economic recovery. Bonds tend to rise when risk appetite wanes.
The Canadian currency rose as high as C$1.0872 to the U.S. dollar, or 91.98 U.S. cents, as Chinese shares stabilized after Monday's selloff.
At 9:20 a.m. (1320 GMT), the Canadian dollar was at C$1.0980 to the U.S. dollar, up from C$1.0950, or 91.32 U.S. cents, at Monday's close.
Meanwhile, steadying prices for crude oil, a key Canadian export, contributed to a steadier tone to the Canadian dollar in early trading as well. Earlier, oil was below $70 a barrel.
Traders also cited news that PetroChinais set to pay C$1.9 billion for a 60 percent stake in two planned Canadian oil sands projects as a positive factor for the Canadian dollar. [ID:nN31233511]
There is no Canadian data until this Friday's key jobs report, which is expected to show the economy shed 10,000 jobs in August while the unemployment rate is pegged to rise to 8.7 percent.
The two-year bondrose 2 Canadian cents to C$99.47 to yield 1.272 percent, while the 10-year bond rose 5 Canadian cents to C$103.17 to yield 3.365 percent.
The 30-year bondedged up 5 Canadian cents to C$118.80 to yield 3.886 percent.
(Reporting by Ka Yan Ng; Editing by Andrew Hay)
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