Mexico peso hurt by worries cenbank could intervene

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MEXICO CITY, Aug 6 (Reuters) - Mexico's peso weakened sharply on Wednesday as stable oil prices boosted the dollar and the market speculated the central bank could intervene to halt the Mexican currency's recent appreciation.

The peso MXN= MEX01 weakened 0.54 percent to 9.9585 per dollar.

The losses marked the second day of weakness for the peso on concern Mexico's central bank may begin as soon as this week to intervene in the currency market, possibly by selling pesos.

"Below 9.90 (pesos to the dollar), there was some concern that we could see a potential for at least more verbal intervention from the central bank against the peso," said Clyde Wardle, an emerging markets currency analyst at HSBC in New York.

Signalling the prospect of central bank intervention, some market players said, was the bank's chief last week decrying the strong peso's adverse impact on exporters. Also significant, in this view, was the suspension last month of , the central bank's daily dollar auctions.

The peso gained more than 4 percent against the dollar between June and the beginning of August as the central bank raised its key interest rate to 8 percent, attracting foreign investors looking to beat paltry yields on U.S. Treasuries.

Even with the losses of the last two days, the currency is still up more than 9 percent for the year.

The dollar gained against world currencies on Wednesday as stable oil prices and renewed expectations of low Federal Reserve interest rates were seen helping the sluggish U.S. economy. (Reporting by Michael O'Boyle, editing by Walker Simon)