EMERGING MARKETS-Currencies steady ahead of US data; EM FX and stocks set for weekly losses

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Russia central bank decision on deck

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MSCI EM FX, stocks index set for weekly declines

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China bond yields fall

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EM FX up 0.1%, stocks down 0.8%

By Lisa Pauline Mattackal

Dec 20 (Reuters) - Most emerging market stocks slipped and currencies steadied on Friday ahead of a key U.S. inflation print, with indexes tracking both set for their worst week in more than a month after a hawkish turn from the Federal Reserve unnerved investors.

The U.S. Federal Reserve's preferred measure of inflation, the Personal Consumption Expenditure index, is due later in the day.

Traders will be looking for signals on how much the Fed could ease policy next year after it projected a more cautious stance in 2025 earlier this week, which saw emerging market stocks and currencies tumble on the prospect of higher-for-longer interest rates in the world's largest economy.

The dollar fell 1% against Russia's rouble, ahead of an interest rate decision where the Russian central bank is expected to hike its main rate by 200 basis points to 23%.

Russian President Vladimir Putin on Thursday flagged signs that the economy was overheating and urged the central bank to make a "balanced decision".

MSCI's emerging markets currency index was up 0.1% at 0915 GMT after falling 0.4% on Thursday.

An index of EM stocks fell 0.8% on the day, weighed down by losses in heavyweight Asian tech stocks.

MSCI's EM currency index dropped 0.5% this week, trading just above a four-month low and on track for its worst week since the week of Nov. 11. Several EM central banks stepped in to prop up their currencies by selling dollars on Thursday.

An index of EM stocks was also on course for its worst week in over one month with weekly declines of more than 3%.

"Stubborn core inflation, the very robust economy and Donald Trump, whose policies are likely to drive up inflation, will leave the Fed with no leeway for further easing of monetary policy," Berenberg analysts said.

"We are comfortable with an underweight position in emerging market equities."

The change in the Fed's outlook puts emerging-market assets under more pressure at the year's end, amid a rising U.S. dollar and Treasury yields, while the threat of tariffs from U.S. President-elect Trump's incoming administration looms.

Hungary's forint was on track to snap three sessions of losses against the euro. The Polish zloty was little changed after retail sales rose 3.1% in November, more than forecast.

Turkey's lira lost more ground against the dollar, and was down 0.2%.

Polish stocks fell 1.4%. South Africa's benchmark index lost 0.7%, trading at its lowest intraday level in over one month.

In Asia, yields on Chinese bonds fell across the curve after China left its benchmark lending rates unchanged, as expected.

HIGHLIGHTS:

** Hungary central bank raises implied forint interest rate by 50 bps for year-end FX swap tenders

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(Reporting by Lisa Mattackal in Bengaluru; Editing by Shounak Dasgupta)