FOREX-Euro hesitates near 2-wk highs, auctions eyed

* Euro holds above $1.23, but off 2-week highs

* Spanish bond auctions seen as litmus test for euro

* High-yielders off peaks, could see a further pullback

By Anirban Nag

SYDNEY, June 17 (Reuters) - The euro consolidated below two-week highs on Thursday, with most investors on the sidelines ahead of a raft of bond auctions in the euro zone area as concerns about Spain's banking system weigh down on sentiment.

Traders said a plunge in U.S. housing starts led high-yielders to pare gains, especially the Australian dollar , which was toppled from one-month highs.

In Asia, investors will see how the Shanghai stock market <.SSEC> performs after it reopens from holidays later on Thursday. Traders say if it fails to catch up with some of the impressive gains seen on Wall Street, the euro and growth-linked currencies could come under pressure.

In Asian trade, the euro was broadly steady at $1.2310, but off a two-week high of $1.2354 on Wednesday. Near term resistance for the euro is still seen at this month's high of $1.2355.

Though the single currency is up 1.6 percent this week, the fact that it has failed to break convincingly through the $1.2350 area could lead to a pull back in the near term, traders said.

Still, many investors will adopt a wait-and-watch stance ahead of a raft of European bond auctions, notably from Spain who will sell 2020 and 2041 bonds on Thursday [ID:nLDE65F1X2].

This could be a litmus test for the euro after spreads of some of the peripherial economies widened over German Bunds, traders said.

"With a hectic period ahead for redemptions and the near-term event risk of the Spanish auctions on Thursday, we remain reluctant to view this as a trend reversal in the fortunes of the euro," JP Morgan said in a morning note.

Against the yen, the euro was up 0.12 percent at 112.52 yen while the dollar was flat at 91.40 yen .

The dollar was marginally higher against the Swiss franc at 1.1304 francs, ahead of Thursday's Swiss National Bank meeting.

The SNB is expected to keep interest rates low but may announce measures to drain excess money from the economy after having flooded the market with francs since 2009 to keep the currency from appreciating too rapidly. [ID:nLDE65E2DB]

The dollar index <.DXY> <=USD> was up at 86.17, hovering well above support near the 85.85 area which is the index's May 28 low.

Meanwhile, the Australian dollar eased from one-month highs of $0.8674. It was trading at $0.8624 in Asian trade with some looking to sell into rallies, given it has failed to break resistance convincingly. (Editing by Wayne Cole)