MEXICO CITY, - Mexico's peso fell sharply on Tuesday
and stocks sank on worries that a deepening downturn in the United
States could push Mexico into recession.

The peso <MXN=>MEX01 lost 1.84 percent to 13.06 per dollar as
investors shunned riskier assets, broadly lifting the greenback
against currencies worldwide.

The central bank auctioned $85 million in currency markets to support
the battered peso.

The benchmark IPC stock index .MXX fell 1.79 percent to 19,662.

Grim corporate news in the United States piled up as aluminum maker Alcoa slashed production capacity on faltering demand and shares in automaker General Motors sank to a 65-year low on
worries it does not have enough cash.

A report on Tuesday showed Chinese import growth slowed in October as domestic demand cooled in the world's fourth-largest economy.

Growing signs of a U.S. recession bode poorly for Mexico, which sends around 80 percent of its exports to the United States, the highest percentage in Latin America.

Citigroup unit Banamex in a note to clients cut its estimate for
economic growth in Mexico next year to 0.5 percent from 1.1 percent.

The peso has lost more than 24 percent of its value since early
August as investors dumped emerging market assets on growing worries about the worst financial crisis in 80 years.

The central bank has sold nearly $13.6 billion from international
reserves to support the peso since October, when the currency saw its steepest declines since the 1995 "Tequila Crisis."