* C$ weakens to C$1.1023 to the U.S. dollar
* U.S. manufacturing expanded in August
* Bond prices higher across curve (Recasts)
By Frank Pingue
TORONTO, Sept 1 (Reuters) - Canada's dollar was down versus the greenback in a choppy session on Tuesday as the boost it got from data showing the U.S. manufacturing sector grew in August was short-lived as stocks tumbled and traders flocked to the U.S. dollar.
The turnaround pulled the Canadian currency from an earlier high of C$1.0910 to the U.S. dollar, or 91.66 U.S. cents, a level it reached after the Institute for Supply Management said the U.S. manufacturing sector had its first month of expansion in more than a year and a half. [ID:nWEN2981]
But investors concerned that stock prices have run too far ahead of the economic recovery opted to pocket recent gains and unload riskier assets, which helped boost the greenback's safe haven appeal.
At 11:55 a.m. (1555 GMT) the Canadian unit was at C$1.1023 to the U.S. dollar, or 90.72 U.S. cents, down from C$1.0950, or 91.32 U.S. cents, at Monday's close.
Toronto's main stock index was down more than 1 percent around midday on Tuesday as oil prices turned lower and dragged down the resource-heavy index, while the index's financial group continued to weigh heavily. [ID:nTOR004927]
"We saw the risk currencies generally underperform a little bit in the overnight session and that's probably accentuated a little bit more since the North American market has really got going here," said Shaun Osborne, chief currency strategist at TD Securities.
With no Canadian data due until the end of the week, the currency's performance is expected to be influenced by the direction in equities and prices for oil.
Friday's key jobs report is expected to show Canada shed 10,000 jobs in August, while the unemployment rate is pegged to rise to 8.7 percent. U.S. employment is also due on Friday.
BOND PRICES ALL HIGHER
Canadian bond prices recouped early losses and moved higher across the curve as the drop in equities sparked demand for more secure assets such as government debt.
But analysts noted price moves are likely to be limited ahead of key jobs data from Canada and the United States on Friday.
"Realistically we are sort of trapped in these ranges ahead of the payrolls numbers on Friday in both countries," said Mark Chandler, fixed income strategist at RBC Capital Markets.
Earlier, Canada set price guidance on its $3 billion five-year global note. The notes are expected to yield about 12 to 15 basis points below midswaps. [ID:nN01482265]
Chandler said there appeared to be strong demand for the offering. Canada said last week it planned to issue a U.S. dollar bond for the first time in a decade to meet obligations made to the International Monetary Fund. [ID:nN28386471]
The two-year bond CA2YT=RR was up 6 Canadian cents at C$99.51 to yield 1.250 percent, while the 10-year bond CA10YT=RR was up 13 Canadian cents at C$103.25 to yield 3.355 percent.
The 30-year bond CA30YT=RR rose 15 Canadian cents to C$118.90 to yield 3.881 percent.
Canadian bonds underperformed their U.S. counterparts across much of the curve. The Canadian 10-year bond yield was about 2.00 basis points below its U.S. counterpart, compared with 3.20 basis points on Monday.
(Editing by Peter Galloway)