(Adds strategist quotes and details throughout; updates prices) * Canadian dollar weakens 0.2% against the greenback * Loonie's decline was smallest among G10 currencies * Price of U.S. oil decreases 1.4% * Canadian bond prices fall across the yield curve By Fergal Smith TORONTO, Sept 25 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday but fared better than its G10 peers as investors worried about U.S. political uncertainty. At 4:23 p.m. (2023 GMT), the Canadian dollar was trading 0.2% lower at 1.3264 to the greenback, or 75.39 U.S. cents, which was the smallest decline among G10 currencies. After notching on Tuesday its strongest intraday level in more than a week at 1.3234, the Canadian dollar traded in a range of 1.3236 to 1.3288. The loonie has become less volatile than some other currencies because domestic economic data this year has been "somewhat strong," said Bipan Rai, North America head of FX Strategy at CIBC Capital Markets. "In the G10 space, Canada has some of the highest rates and if you are a foreign investor, that appeals to you," Rai said. Canada's economy expanded at an annualized rate of 3.7% in the second quarter, while the Bank of Canada has left interest rates on hold this year even as many central banks, including the U.S. Federal Reserve, have eased. The U.S. dollar rallied against a basket of major currencies as investors were drawn to its safe-haven appeal a day after news of the launch of a formal impeachment inquiry into U.S. President Donald Trump drove a sharp move lower in risky assets. With the inquiry launched, Trump voiced skepticism over whether House of Representatives Speaker Nancy Pelosi would hold a vote on the new U.S-Mexico-Canada trade agreement (USMCA). Canada sends about 75% of its exports, including oil, to the United States. The price of oil logged a second straight day of losses, down 1.4%, after U.S. crude inventories unexpectedly rose and on worries that demand could fall due to the U.S.-China trade conflict. 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 lower across a steeper yield curve in sympathy with U.S. Treasuries, with the 10-year falling 89 Canadian cents to yield 1.402%. Earlier in the session, the 10-year yield touched its lowest level since Sept. 6 at 1.289%. (Reporting by Fergal Smith; Editing by Steve Orlofsky and Peter Cooney)
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