* C$ hits 3-week low of C$1.0822
* Data to show economy grew 0.1 pct in Aug
* Bond prices stuck lower across curve
TORONTO, Oct 29 (Reuters) - The Canadian dollar was steady versus the U.S. currency early on Thursday after rallying off a three-week low hit overnight as investors jockeyed for position ahead of monthly domestic GDP data.
The turnaround in the Canadian currency helped lift it off an overnight low of C$1.0822 to the U.S. dollar, or 92.40 U.S. cents, which marked its lowest level since Oct. 5.
After many investors unloaded currencies considered risky in favor of the greenback this week, Canada's dollar appeared to return to favor ahead of data due shortly that could show growth in the domestic economy.
Gross domestic product data due at 8:30 a.m. (1230 GMT) is expected to show Canada's economy grew 0.1 percent in August after stagnating in July.
"The market is waiting for the GDP numbers and ahead of it we're seeing some risk appetite returning to the market," said Matthew Strauss, senior currency strategist at RBC Capital Markets.
"But it's more a result of the sharp selloff that we've seen during the last few days rather than indicative of the market willing to turn around."
At 7:35 a.m. (1135 GMT), the Canadian unit was at C$1.0777 to the U.S. dollar, or 92.79 U.S. cents, up from C$1.0785 to the U.S. dollar, or 92.72 U.S. cents, at Wednesday's close.
Domestic bond prices were down across the curve alongside a similar move in the bigger U.S. Treasury market.
(Editing by Chizu Nomiyama)
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