* 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 uncertainty. 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. cents. 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)
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