* EM stocks up 0.84%, currencies dip

* US CPI in-line with expectations

* South Korean equities hit three-week high

By Niket Nishant

Aug 13 (Reuters) - Emerging market stocks hit a one-month

high on Thursday while currencies slipped, underscoring the

uncertainty among investors trying to manoeuvre through a murky

outlook for interest rates.

Data on Wednesday showed that U.S. inflation in July was in

line with expectations, reducing the urgency for rate hikes and

buoying risk appetite.

An MSCI index of emerging market stocks rose 0.84%

after hitting its highest since July 10 earlier in the session.

But regional currencies fell 0.08%,

suggesting that investors were not ready to rule out a stronger

dollar in the future.

With the crucial Strait of Hormuz still closed, investors

worry that oil prices may stay elevated and force the Federal

Reserve to raise rates, benefiting the dollar at the expense of

EM currencies.

The latest data gives the Fed "more room to see more data

before making changes to the policy rate," wrote Tiffany

Wilding, an economist at PIMCO.

"However, FOMC members will want more assurance that

inflation is moving in the right direction," she added,

referring to the Federal Open Market Committee, which decides

monetary policy.

The divergence highlights the doubts that have gripped

markets caught between a bullish outlook for stocks and an

ambiguous economic backdrop.

SOUTH KOREAN STOCKS HIT THREE-WEEK HIGH

South Korea's KOSPI index, a top beneficiary of the

AI boom, hit its highest in nearly three weeks after chipmakers

SK Hynix ( SKHY ) and Samsung Electronics ( SSNLF )

rallied.

The Korean won weakened 0.24% against the dollar.

Earlier this week, the central bank's outgoing deputy chief said

interest rates will be raised further to tame persistent

inflationary pressures.

Indonesian equities fell 1.13%. Ride-hailing giant

GoTo Gojek Tokopedia, one of the country's most

valuable companies, is set to be removed from MSCI's Indonesia

index as part of a rebalance at the end of the month.

The yuan was little changed against the dollar.

The U.S. dollar-Chinese yuan became the most-traded currency

pair in Hong Kong, surpassing the Hong Kong dollar-U.S. dollar

for the first time in April.

Beijing and Hong Kong authorities have unveiled a range of

measures to bolster currency, bond and gold trading in Hong

Kong.

Polish equities fell 0.75% and were on course to snap

a three-day winning streak after an estimate from the statistics

office showed second-quarter gross domestic product rose in line

with forecasts.

The Polish zloty was largely unchanged versus the

euro.

"It's not clear to us that Poland's strong performance in

the second quarter will be repeated in Q3," said William

Jackson, chief emerging markets economist at Capital Economics.

"This strong growth is unlikely to shift the balance towards

monetary tightening."