EMERGING MARKETS-Firm dollar pulls EM currencies lower

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Focus on U.S. elections on Nov. 5

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S.Africa inflation at 3.8% YoY in September

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EM stocks up 0.3%, FX off 0.1%

By Shashwat Chauhan

Oct 23 (Reuters) - Most emerging market currencies slipped on Wednesday, as investors tweaked their bets towards a gradual monetary policy easing by the Federal Reserve which helped the dollar, while caution remained in lead-up to the U.S. presidential election.

MSCI's index for emerging markets stocks added 0.3% after falling for the last two days, as stocks in mainland China and Hong Kong closed higher.

A gauge for currencies dipped 0.1% by 0840 GMT as the greenback strengthened globally, with the dollar index hitting a near three-month high.

The dollar has remained in favour globally as investors scale back expectations of rampant rate cuts by the Fed, with a rise in Treasury yields reflecting that sentiment.

Traders currently see an 89% chance of the Fed opting for a 25-basis-point rate cut in November, as per CME's FedWatch Tool.

Also adding a layer of uncertainty was the upcoming U.S. elections on Nov. 5, with latest polls showing Democratic U.S. Vice President Kamala Harris holding a marginal 46% to 43% lead over Republican former President Donald Trump.

Recent market pricing of a Trump win has given the dollar a boost, as his proposed policies on taxes and tariffs are seen as inflationary, likely keeping U.S. interest rates high and undermining the currencies of trading partners.

Most currencies in Central Eastern Europe slipped against the euro, while local bourses were mixed.

South Africa's rand slipped 0.3% against the dollar after data showed headline consumer inflation fell slightly more than expected in September, to 3.8% year on year from 4.4% in August.

Talking about the drop in inflation, David Omojomolo, Africa economist at Capital Economics said that it means that the South African Reserve Bank "will almost certainly continue its easing cycle".

"The sharp drop does raise the chance of the SARB acting more aggressively and cutting by 50bp next month."

Also on the radar would be the summit of the BRICS group - Brazil, Russia, India, China and South Africa - which has expanded to include Egypt, Ethiopia, Iran and the United Arab Emirates, being held in Russia from Oct. 22-24.

Elsewhere, Georgia's central bank kept its benchmark refinancing rate unchanged at 8% on Wednesday.

HIGHLIGHTS:

** Goldman cuts Indian equities to 'neutral' as economic, earnings growth slows

** China's stimulus measures not enough, Yellen and IMF chief economist say

** Maldives to focus on managing debt bilaterally, ends work with Centerview

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Mrigank Dhaniwala)