* Successful Spanish bond auction adds reassurance
* Brazil's real gains 0.58 pct, Mexican peso up 0.62 pct (Adds comments from Mexico, Chile graph, updates prices)
By Caroline Stauffer and Samantha Pearson
MEXICO CITY/SAO PAULO, Nov 18 (Reuters) - Latin American currencies firmed on Thursday as fears over Irish debt subsided, prompting investors to return to the region's higher-risk assets.
Ireland is expected to receive tens of billions of euros in loans from European partners and the IMF to help shore up its shattered banks and stabilize the economy. [ID:nLDE6AH0HV]
"The news about Ireland has brought back enough optimism for traders to take positions of risk -- the peso is performing quite well," said one currency trader from the western Mexico city of Guadalajara.
A Spanish bond auction that passed relatively smoothly, reflecting greater confidence in the euro zone, also helped Latin American currencies to strengthen, said Pedro Tuesta, a Latin America economist with 4Cast in Washington.
The Mexican currency
Concerns over euro zone debt had battered Latin American currencies over recent days. As well as scaring investors away from emerging markets, a full-blown crisis in Europe could also impact global growth, reducing demand for Latin America's exports.
The Mexican peso lost 1.78 percent between Nov. 5 and this past Tuesday. Its recent losses brought the currency close to its 50-day moving average against the dollar before it changed tendency on Wednesday.
"The resistance of the dollar (versus the Mexican peso) against its 50-day moving average gives more reassurance that the peso will recover over the next few days," wrote analysts at the MetAnalisis consultancy in Mexico City.
The Chilean peso
"International stock markets are positive, copper improved
in international markets and this is causing the peso to
appreciate a little against yesterday's close," said one trader
in Santiago. "All of this, because there is less uncertainty
over the Ireland issue."
See graphic on factors driving Chile's peso: http://graphics.thomsonreuters.com/F/11/CL_PESOCU1110.gif
The Brazilian real
Brazil has fought at the forefront of what Finance Minister Guido Mantega calls an international "currency war." tripling a tax on capital inflows into local bonds to 6 percent last month and regularly buying dollars in the foreign exchange market.
The measures have helped contain the rise in the local currency somewhat, but the real is still up more than 4 percent since late June.
"Given Mantega's rhetoric we would expect more noise again as soon as we touch close to 1.70," 4Cast's Tuesta said.
Bank of Mexico Deputy Governor Manuel Sanchez on Thursday added to complaints against the U.S. central bank's Treasury bond purchasing program that is seen keeping the dollar weak and causing Latin American currencies to appreciate.
Rock-bottom interest rates from the U.S. Federal Reserve are dangerous, and risk fanning trade protectionism and hurting global economic growth, Sanchez said in Washington. [ID:nWBT014249] (Additional reporting by Maria Jose Latorre in Santiago and Noe Torres in Mexico City; Editing by Dan Grebler)