MEXICO CITY, April 16 (Reuters) - Mexico's peso weakened the most on Tuesday compared with a basket of 20 other major global currencies, trading down about 1.6%, partly reflecting growing risk aversion amid worries of a further escalation of conflicts in the Middle East.
The peso, one of the world's most traded currencies, was valued at just below the 17 pesos per U.S. dollar psychological barrier, or 16.9867 pesos per greenback. Earlier on Tuesday, it briefly weakened past the barrier, which had not happened since late February.
Over the past six trading days, the currency has weakened 4.13%, but since the beginning of the year is only down by 0.19%.
Last week, the peso had appreciated to its strongest level in nearly nine years, at 16.2559 pesos per dollar.
The Mexican currency has showed surprising strength in recent years, which outgoing President Andres Manuel Lopez Obrador has argued is a reflection of investor confidence in his economic policies, though many analysts dispute that.
Speculation over how the U.S. Federal Reserve might adjust interest rates also likely factors into the peso's slide this week.
"Markets remain vigilant for a possible escalation of the conflict in the Middle East and continue to speculate that interest rates in the United States will remain high over a longer time," CIBanco wrote in an analysis note.
Market jitters deepened after
Israeli leaders said
they would respond to a direct attack on its territory by Iran last weekend, even as many leaders, including U.S. President Joe Biden, have urged restraint.
Local financial institution Banco Base sees the peso trading between a range of 16.92 and 17.10 pesos per dollar for the remainder of Tuesday trading. (Reporting by Noe Torres; Writing by David Alire Garcia; Editing by Brendan O'Boyle and Leslie Adler)
