Mexico peso, stocks gain on US bank tests, job data

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MEXICO CITY, May 8 (Reuters) - Mexico's peso firmed on Friday and stocks rose as the U.S. government's stress tests eased worries about major banks and data showed employers in the United States cut fewer jobs than expected in April.

Any sign that the U.S. recession is easing bodes well for Mexico, which sends some 80 percent of its exports to its northern neighbor.

The peso MXN=MEX01 gained 0.85 percent to 13.08 per dollar, while the IPC stock index .MXX rose 1.61 percent to 23,968. Earlier this week, the IPC hit its highest level since the beginning of October.

Investors around the world took heart after U.S. regulators on Thursday ordered 10 of the country's biggest banks to raise $75 billion of capital -- less than some analysts had estimated -- to bolster their ability to weather more shocks.

Further underpinning optimism, data on Friday showed the smallest reduction in U.S. payrolls since October.

"We are still seeing declines in the data, but they are not so pronounced. If this pattern holds up through June, we could be saying the recession has found its bottom," said Ricardo Aguilar, an analyst at Invex brokerage in Mexico City.

The peso has bounced back by nearly 6 percent since being hammered in late April on worries a flu outbreak could further undermine Mexico's slumping economy.

But Aguilar said it was unlikely the peso would be able to gain enough momentum to break through the psychological level of 13 per dollar due to the mounting evidence that Mexico's recession will be deeper than expected.