Mexican peso hit by dollar rally, oil; stocks jump

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MEXICO CITY, Aug 22 (Reuters) - Mexico's peso slipped on Friday as the dollar gained broadly on a drop in crude oil prices, while stocks jumped following a rally in equites in the United States, Mexico's top trading partner.

The peso MXN= MEX01 weakened 0.49 percent at the central bank's final 1:30 p.m. (1830 GMT) reference to 10.144 per dollar.

The IPC stock index .MXX closed 1.28 percent higher at 26,875.45 points.

The U.S. dollar gained against most major currencies on Friday, buoyed by a sharp pullback in oil prices amid worries that a global slowdown could ease demand for crude.

Traders said the dollar's global rally hit the peso and other currencies in Latin America.

"There was a regional decision to get out of Latin America markets, get out of commodities and go back to the United States," said Miguel Angel Flores, an analyst at government bank Bansefi.

The peso also weakened after local inflation data for early August came out in line with central bank estimates and reinforced views that policy-makers are unlikely to further raise interest rates.

Even with today's losses, the peso is up around 7.7 percent year to date on the back of relatively high interest rates that attract foreign investors looking to beat paltry yields on U.S. Treasuries.

Most analysts expect the central bank will hold interest rates steady until the end of the year after having tightened borrowing costs three times since June.

In debt trading, the government's benchmark 10-year peso bond MX10YT=RR rose 0.124 of a point in price to bid 94.934, pushing its yield down 2 basis points to 8.54 percent.

Mexican stocks rose as falling oil prices and hopes that U.S. investment bank Lehman Brothers Holdings Inc LEH.N may attract a major investor spurred sharp gains in the United States equity markets.

Good news for the U.S. economy usually bodes well for Mexico, which sends about 80 percent of its exports to its northern neighbor.

Shares of America Movil (AMXL.MX), Latin America's biggest cell phone operator, added 2.40 percent to 26.45 pesos while its New York-traded shares (AMX.N) added 1.87 percent to $52.19.

Shares of top retailer Wal-Mart de Mexico (WALMEXV.MX) gained 2.15 percent to 38.91 pesos.

Cemex (CMXCPO.MX), the biggest U.S. cement supplier, rose 1.75 percent to 20.93 pesos while its stock on Wall Street (CX.N) gained 1.03 percent to $20.62. (Reporting by Michael O'Boyle, Tomas Sarmiento and Inaki Maillard; Editing by Dan Grebler)