UPDATE 1-Mexican peso slides after Trump's 25% tariff threat

Adds quotes, background, updates prices

By Libby George

LONDON, Jan 21 (Reuters) - Mexico's peso fell more than 1% against the dollar on Tuesday, after President Donald Trump threatened 25% tariffs on Mexico and Canada as soon as Feb. 1.

The peso MXN= stood at 20.77 to the dollar by 1015 GMT, just off its weakest intraday level of 20.797 but still not far from the 20.94 touched on Jan. 17, which was its weakest since July 2022.

The peso - a weather vane for emerging market sentiment - has been heavily impacted by proposed policies from newly inaugurated U.S. President Donald Trump - particularly his plans for trade tariffs.

"Trump seemed to delay tariffs...But somehow Mexico and Canada are an exception, which is I think very weird for the market because when he started his election campaign, China was more of the obvious target," said Michael Pfister, a foreign exchange analyst with Commerzbank.

He added that with other countries omitted from tariff threats for now, the two countries that will be hit will be hurt the most.

The Canadian dollar had lost just under 1% against the U.S. dollar by 1014 GMT, trading at 1.44.

Before his inauguration, Trump said he could slap 10% tariffs on global imports and 60% on Chinese goods in addition to the 25% on Canadian and Mexican imports.

Mexico's peso had already lost nearly 20% of its value against the U.S. dollar over the past year, driven in part by Mexico's presidential election and the constitutional changes that followed it, something Pfister said partly provided the currency with a floor.

"It seems like by now, the market is, at least with regard to the Mexican peso, somewhat happy with the level we are seeing," Pfister said.

(Reporting By Libby George in London. Additional reporting by Rodrigo Campos in New York. Editing by Karin Strohecker and Kirsten Donovan)

((Libby.George@thomsonreuters.com; +44 07527 061331; Reuters Messaging: libby.george@thomsonreuters.com))