CANADA FX DEBT-Canadian dollar dips as greenback shakes off political uncertainty

    * Canadian dollar falls 0.2% against the greenback
    * Price of U.S. oil decreases 2.5%
    * Canada's 10-year yield hits a near 3-week low at 1.289%

    TORONTO, Sept 25 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday, giving back gains
from the day before when investors worried about U.S. political
    The U.S. dollar        recovered against a basket of major
currencies after being hit on Tuesday by the launch of a formal
impeachment inquiry against U.S. President Donald Trump.
    At 9:31 a.m. (1331 GMT), the Canadian dollar          was
trading 0.2% lower at 1.3272 to the greenback, or 75.35 U.S.
    The currency, which notched on Tuesday its strongest
intraday level since Sept. 16 at 1.3234, traded in a range of
1.3236 to 1.3282.
    The loonie lost ground as the price of oil, one of Canada's
major exports, fell for a second day.             
    U.S. crude oil futures        were down 2.5% at $55.85 a
barrel as investors worried that fuel demand could weaken after
Trump doused recent optimism over China-U.S. trade talks at a
time of rising U.S. crude oil stockpiles.
    Meanwhile, Canada's Jagmeet Singh, facing a rout of his
left-wing New Democratic Party (NDP) in next month's election,
may have revived his party's fortunes with his emotional
response to Prime Minister Justin Trudeau's blackface picture.
    Should the NDP or the Greens emerge from the Oct. 21
election holding the balance of power, that could make planned
expansion of the Trans Mountain oil pipeline less likely.
    Canadian government bond prices were mixed across the yield
curve, with the two-year            down 0.5 Canadian cent to
yield 1.522% and the 10-year             rising 3 Canadian cents
to yield 1.304%.
    The 10-year yield touched its lowest intraday level since
Sept. 6 at 1.289%.    

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)