Mexico peso falls from 6-year high, stocks jump

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MEXICO CITY, Aug 5 (Reuters) - Mexico's peso weakened on Tuesday on worries the country's central bank could act to curb the currency's gains, while stocks rallied as oil prices fell and the Federal Reserve held interest rates steady.

The peso <MXN=> MEX01 lost 0.31 percent to 9.905 per dollar, slipping from a six-year high.

The benchmark IPC stock index .MXX closed 1.9 percent higher at 26,990.19 points after falling to a six-month low on Monday.

In the currency market, traders said the peso was knocked from its strongest level since August 2002 by profit-taking and following a report from UBS that said Mexico's central bank may begin as soon as this week to intervene in the currency market to keep the peso from appreciating further.

"The rumor was out there this morning ... the government isn't very content with these levels," said Omar Martin del Campo at Banco Ve Por Mas in Mexico City.

Central Bank Gov. Guillermo Ortiz suggested last week that the strength of the peso is beginning to hurt Mexican exporters.

Last month the central bank suspended its daily dollar sales, a move that was interpreted by some market players as a first step to weaken the peso.

The peso has gained more than 4 percent against the dollar since June as the central bank raised its key interest rate to 8 percent, attracting foreign investors looking to beat paltry yields on U.S. Treasuries. The currency is up more than 10 percent for the year.