Mexico peso hits 3-week high on US consumer data

* Peso firms 0.12 pct, IPC stock index gains 0.67 pct

* Rise in U.S. consumer sentiment offsets retail drop (Recasts, adds comment and stock movements)

MEXICO CITY, June 11 (Reuters) - Mexico's peso firmed on Friday as a rise in U.S. consumer confidence outweighed a surprise drop in retail sales in the United States, Mexico's top trading partner.

Even though the peso notched its best week in five months, analysts were skeptical that demand for riskier assets has made a definitive break from recent concerns that major economies could be heading for another slowdown in growth.

The peso MXN=MEX01 firmed 0.12 percent to 12.67 per U.S. dollar, while the IPC stock index .MXX rose 0.67 percent to 32,214.28.

Data showed U.S. consumer sentiment near a 2-1/2-year high, which offset a surprise 1.2 percent slide in U.S. retail sales.

Mexico is counting on solid U.S. demand to fuel a recovery from last year's deep recession, but doubts are growing about the pace of a rebound north of the border.

Mexico's peso fell sharply in April and May on concerns Europe's debt crisis could weigh on the global economic recovery, but the currency has recently been paring losses.

"The peso seems to be on a new roll," said Daniela Blancas, a strategist at Scotia Capital in Mexico City.

"But I do not think the consumer demand data ends the fears of a 'double dip.' We are going to keep seeing data that is not that positive, or that negative," she added.

The peso hit a three-week high of 12.6469 during the session.

Data on Friday showed Mexican industrial production fell in April, month-on-month, in a setback to the nation's recovery. [ID:nN11125408]

Traders said the peso would likely continue its recent trend of gains in the next week, unless some surprising news hit the market.

"The peso should be trading in a narrow range to positive, and looking for the 12.50 level," Ramses Villela, a trader at Bulltick Capital Markets.

In stock trading, shares in bank Inbursa (GFINBURO.MX) rose 3.03 percent to 46.52 pesos.

Shares in base metals miner Penoles (PENOLES.MX) gained 3.42 percent to 258.00 pesos. (Reporting by Michael O'Boyle and Jean Luis Arce; Editing by Diane Craft)