* Fx off lows but weaker as Spain concern pushes back euro
* Stocks mixed, leu resilient after govt survives vote
* Demand strong at Czech bond auction, weak at Polish tender
* Hungary bond auction watched on Thursday
(Recasts with fresh prices, comments)
By Dagmara Leszkowicz and Sandor Peto
WARSAW/BUDAPEST, June 16 (Reuters) - Central European currencies were off intraday lows in late trade on Wednesday but eased from Tuesday as fresh concerns over Spain's debt pushed back the euro from two-week highs against the U.S. dollar.
The euro <EUR=> is Central Europe's reference unit and tight financial and trade links with the West of Europe also make the region vulnerable to the euro zone debt crisis.
"The currencies are coming back now (rebounding) as the euro also firmed past 1.23 (against the dollar), after easing to about 1.2250 earlier today," one Budapest-based currency dealer said.
The euro's earlier retreat followed a rise in the spread of 10-year Spanish government bond yields over German Bunds to a euro life high after a report about an international liquidity plan for Spain, even though the report was denied. [
]News about the euro debt crisis caused general asset price falls in Central Europe several times this year.
The reaction to Wednesday's news in the region was mixed.
The main stock indices stayed near Tuesday's closing levels, apart from Romania's <
> which firmed 2.7 percent and among currencies Romania's leu <EURRON=> was relatively resilient, weakening by only 0.2 percent against the euro by 1435 GMT.The region's most liquid currencies, the zloty <EURPLN=> and the forint <EURHUF=>, shed 0.7 and 0.6 percent, respectively, while the Czech crown<EURCZK=> lost 0.4 percent.
Romania's government late on Tuesday survived a no-confidence vote in parliament.
The vote gave it a mandate to cut public spending as required under the IMF deal, but a tight margin of victory raised concerns over the coalition's ability to push beyond the austerity plan. [
]"The failure of the no-confidence vote should provide some relief to investors, at least until September," analysts at Citibank wrote in a note.
"The narrow margin of the victory, however, paints a challenging picture in terms of the government's ability to press ahead with the reform agenda under the umbrella of the IMF programme."
Romania followed Hungary's lead during the financial crisis by securing a 20 billion euro International Monetary Fund/European Union lifeline to alleviate funding worries.
DEBT AUCTIONS MIXED, HUNGARY NEXT
An auction of 10-year Czech government bonds attracted solid demand and the government sold 6.95 billion crowns worth of papers in the non-competitive round of bidding, well above its 4.25 billion crown plan. [
]The yield on the bond <CZ1002547=> was flat on the day in later trade at 4.639 percent, rising back to levels seen before the auction.
Demand at a Polish 10-year bond auction was only a touch above the 2.43 billion zlotys worth of bonds sold and traders said investors were seeking shorter maturities.[
]Yields were well above levels seen at previous primary sales in April, although they rose only slightly after the auctions.
Investors closely watch government debt auctions in the region amid the debt concerns in the European Union.
Hungary, the region's most indebted state, will hold bond auctions on Thursday.<HUISSUE> Hungarian bond prices extended their losses after the Spanish news, and yields traded higher by about 10 basis points from Tuesday.
"I think the auctions will be weak and bonds may be sold at even higher yield levels than now," one Budapest-based trader said. For a preview on the auctions pls click on [
] --------------------------MARKET SNAPSHOT-------------------- Currency Latest Previous Local Localclose currency currency
change change
today in 2010 Czech crown <EURCZK=> 25.742 25.633 -0.42% +2.24% Polish zloty <EURPLN=> 4.087 4.057 -0.73% +0.42% Hungarian forint <EURHUF=> 280.4 278.64 -0.63% -3.58% Croatian kuna <EURHRK=> 7.21 7.211 +0.01% +1.38% Romanian leu <EURRON=> 4.232 4.223 -0.21% +0.13% Serbian dinar <EURRSD=> 103.47 103.063 -0.39% -7.34%
Yield Spreads Czech treasury bonds <0#CZBMK=> 2-yr T-bond CZ2YT=RR +8 basis points to 151bps over bmk* 7-yr T-bond CZ7YT=RR +4 basis points to +169bps over bmk* 10-yr T-bond CZ9YT=RR +6 basis points to +152bps over bmk* Hungarian treasury bonds <0#HUBMK=> 3-yr T-bond HU3YT=RR +11 basis points to +638bps over bmk* 5-yr T-bond HU5YT=RR +15 basis points to +592bps over bmk* 10-yr T-bond HU10YT=RR +16 basis points to +497bps over bmk* *Benchmark is German bond equivalent. All data taken from Reuters at 1635 CET. Currency percent change calculated from the daily domestic close at 1600 GMT.
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