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EMERGING MARKETS-Emerging Europe muscles higher as GDP readings smash forecasts

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LONDON, Aug 16 (Reuters) - The Czech crown and Polish zloty jumped on Wednesday after strong economic growth data smashed forecasts, while emerging market stocks rose to a one-week high as tensions between North Korea and the United States eased.

Czech growth rose to 4.5 percent year-on-year in the second quarter, well above the 2.9 percent forecast. The Czech crown leapt 0.4 percent against the euro to near two-week highs.

Central Europe's biggest market, Poland, delivered 3.9 percent growth, beating forecasts and lifting the zloty 0.4 percent and shares in Warsaw 0.7 percent. Romania's economy expanded 5.9 percent, also beating forecasts.

"It just shows that Central and Eastern Europe economies are benefiting from low interest rates in the rest of Europe and the fact that they have kept fairly solid macroeconomic policies," said Jakob Christensen, head of emerging markets research at Danske Bank.

MSCI's benchmark emerging stocks index was up 0.5 percent, also helped by gains in Asia after North Korean leader Kim Jong Un delayed a decision to fire missiles towards the U.S. Pacific territory of Guam, as Pyongyang had previously threatened.

The United States said it was open to a dialogue, dialling down the warlike rhetoric which last week drove emerging stocks to one-month lows.

South Korean stocks rose 0.6 percent to one-week highs as markets reopened after Tuesday's public holiday. The won firmed 0.6 percent against the dollar, having hit its lowest in a month last Friday.

Even though upbeat U.S. retail sales data have raised the chance of another rate rise by the Federal Reserve this year , Christensen said the fact that American consumers were spending was good news for export-oriented emerging markets.

The market is now awaiting the release of Fed meeting minutes to shed further light on the pace of tightening.

"We have a base case they will raise rates in December and announce quantitative tightening in September, but (the latter) will have a fairly benign impact on emerging markets as with the current pace of rate hikes it should be manageable," he said.

Hong Kong shares rose 0.9 percent, India gained 0.7 percent and Indonesia rose 0.6 percent to a one-month high. Indonesia's president has proposed a 2018 budget based on economic growth of 5.4 percent next year, faster than the 5.2 percent target in 2017.

Chinese mainland shares underperformed, slipping 0.1 percent after new loans fell to an eight-month low in July, reinforcing views that economic growth will cool in coming months.

The yuan weakened a touch against the dollar as the central bank guided its official fixing to the lowest level in a week.

South Africa's rand firmed 0.3 percent, extending Tuesday's gains after a court rejected a proposal for the central bank to focus its monetary policy on boosting economic growth instead of fighting inflation and keeping the rand currency stable.

Moody's said political tensions were still constraining South Africa's growth.

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 1057.63 +5.12 +0.49 +22.66 Czech Rep 1032.01 -0.49 -0.05 +11.98 Poland 2389.30 +12.64 +0.53 +22.66 Hungary 36819.10 +43.16 +0.12 +15.05 Romania 8284.54 -49.74 -0.60 +16.93 Greece 834.54 +6.77 +0.82 +29.66 Russia 1031.50 +4.05 +0.39 -10.49 South Africa 49048.64 +393.52 +0.81 +11.72 Turkey 05077.35 -1835.91 -1.72 +34.48 China 3246.62 -4.64 -0.14 +4.61 India 31648.45 +199.42 +0.63 +18.86 Currencies Latest Prev Local Local close currency currency

% change % change

in 2017

Czech Rep 26.05 26.14 +0.35 +3.68

Poland 4.27 4.29 +0.44 +3.12

Hungary 303.84 304.13 +0.10 +1.64

Romania 4.57 4.57 +0.01 -0.79

Serbia 119.30 119.28 -0.02 +3.39

Russia 59.65 59.70 +0.07 +2.70

Kazakhstan 332.79 333.21 +0.13 +0.26

Ukraine 25.57 25.59 +0.08 +5.61

South Africa 13.26 13.30 +0.34 +3.57

Kenya 103.65 103.60 -0.05 -1.23

Israel 3.61 3.62 +0.06 +6.57

Turkey 3.53 3.53 +0.15 -0.06

China 6.69 6.68 -0.13 +3.74

India 64.20 64.12 -0.12 +5.84

Brazil 3.17 3.17 +0.00 +2.65

Mexico 17.78 17.80 +0.13 +16.54

Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 322 -1 .03 7 93.49 1

(Reporting by Claire Milhench, additional reporting by Karin Strohecker; Editing by Mark Trevelyan)