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EMERGING MARKETS-Emerging stocks, FX edge lower ahead of Fed despite tepid dollar

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LONDON, July 25 (Reuters) - Emerging markets stocks and some currencies softened a touch on Tuesday as a tepid dollar and higher oil and commodity prices held back risk appetite in the run up to a meeting of U.S. Federal Reserve policy makers.

MSCI's emerging market benchmark weakened 0.2 percent, pulling back from the 27-month high hit on Monday as losses across Asia weighed on the index, which has rallied ten out of eleven previous session.

Stocks in South Africa gained 0.7 percent while Turkish peers rose 0.4 percent. But the gains failed to make up for heavyweight South Korea, which closed 0.5 percent lower as offshore investors took profit.

China's bluechip index slipped 0.6 percent with fresh talk by Beijing about preventing systemic financial risk reigniting fears of tighter regulations. And while India's main index topped 10,000 points for the first time on hopes for better earnings, accelerating economic growth and government reforms, it later eased 0.1 percent.

Currencies fared little better with South Africa's rand and Turkey's lira weakening 0.2 percent despite a lacklustre dollar.

The dollar failed to hold onto gains made earlier in the session on better-than-expected economic data and expectations that the U.S. Federal Reserve will signal at a meeting starting later on Tuesday its readiness to begin reducing its bond portfolio at its September meeting.

Fresh signs that the administration of U.S. President Donald Trump was struggling to make significant progress on fiscal reforms should keep the dollar tame and a Fed interest rate hike off the cards for this year, said Piotr Matys, emerging markets strategist at Rabobank.

"We have witnessed quite impressive gains across emerging markets so it is just pausing, but the outlook is still relatively positive," said Matys.

"It is not only about this very gradual pace of monetary policy tightening by the Fed, but various emerging markets are growing...and there is scope for emerging markets to expand in the second half of this year."

Meanwhile higher oil helped Russia's rouble strengthen 0.3 percent following two days of losses. Crude prices extended gains after Saudi Arabia pledged to curb exports from next month and OPEC called on several members to boost compliance with output cuts to help rein in oversupply and tackle flagging prices.

Across central Europe, Poland's currency was the best performer. The zloty advanced 0.3 percent against the euro as President Andrzej Duda on Tuesday signed into law a bill giving the justice minister the power to hire and fire the heads of ordinary courts.

The bill was one of three passed by parliament as part of the Law and Justice (PiS) party's flagship judicial reform plan, which brought tens of thousands of protesters onto the streets and raised concerns in the European Union and Washington. In a surprise move, Duda had vetoed two of three judicial reform bills passed by parliament.

In Nigeria, central bank policy makers are expected to keep interest rates at 14 percent when they publish their decision later in the day. Africa's largest economy, in its second year of recession, had been battling stubbornly high inflation which stood at more than 16 percent in June.

For GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see) Emerging Markets Prices from Reuters

Equities Latest Net Chg % Chg % Chg

on year

Morgan Stanley

Emrg Mkt Indx 1061.95 -2.32 -0.22 +23.16 Czech Rep 1011.00 +3.33 +0.33 +9.70 Poland 2330.29 -4.40 -0.19 +19.63 Hungary 35321.03 -41.80 -0.12 +10.37 Romania 8326.45 -13.78 -0.17 +17.52 Greece 845.89 -3.18 -0.37 +31.42 Russia 1013.05 -0.64 -0.06 -12.09 South Africa 48416.68 +358.33 +0.75 +10.28 Turkey 07430.40 +719.88 +0.67 +37.49 China 3243.77 -6.83 -0.21 +4.51 India 32261.93 +16.06 +0.05 +21.16 Currencies Latest Prev Local Local close currency currency

% change % change

in 2017

Czech Rep 26.01 26.04 +0.09 +3.82

Poland 4.25 4.26 +0.19 +3.51

Hungary 305.26 305.05 -0.07 +1.17

Romania 4.56 4.56 -0.05 -0.59

Serbia 120.45 120.46 +0.01 +2.41

Russia 59.82 59.98 +0.27 +2.42

Kazakhstan 327.03 327.46 +0.13 +2.02

Ukraine 25.86 25.80 -0.24 +4.42

South Africa 12.99 12.95 -0.34 +5.71

Kenya 103.75 103.80 +0.05 -1.33

Israel 3.57 3.56 -0.18 +7.94

Turkey 3.56 3.55 -0.06 -0.85

China 6.75 6.75 -0.02 +2.86

India 64.39 64.39 +0.00 +5.52

Brazil 3.15 3.15 -0.01 +3.41

Mexico 17.75 17.73 -0.11 +16.72

Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 327 -1 .00 7 89.00 1

All data taken from Reuters at 08:55 GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT. (Reporting by Karin Strohecker, additional reporting by Claire Milhench Editing by Jeremy Gaunt)