Mexico peso firms as EU auctions ease debt fears

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MEXICO CITY, June 15 (Reuters) - Mexico's peso jumped on Tuesday after solid demand for bond sales in Europe eased concerns about the euro zone's debt problems.

The peso MXN=MEX01 strengthened 0.62 percent to 12.6120 per U.S. dollar as the euro also gained ground and emboldened investors to pile into riskier emerging market currencies.

Spain and Belgium sold government debt and Ireland issued bonds in auctions, easing concerns that a debt crisis seen in Greece could spread to other nations in the euro zone.

Mexico's peso has been battered in recent months on fears Europe's debt troubles will stifle a global economic recovery. But the Mexican currency had been paring its losses, gaining around 4 percent from a low in May.

The peso's gains clawed back much of its losses on Monday when a debt downgrade of Greece rattled financial markets and put the Mexican currency back on track toward a one-month high.

"In moderate risk environment, we continue to favor the peso and stick to our view for a directional move lower," wrote RBS Securities strategist Flavia Cattan-Naslausky in a note to clients,

Further supporting sentiment, a gauge of manufacturing in New York State showed the sector continued to grow in June, in-line with expectations, assuring investors about the pace of the economic recovery in the United States, Mexico's top trading partner. (Reporting by Michael O'Boyle; Editing by Theodore d'Afflisio)