EMERGING MARKETS-Asia FX, stocks gain on soft dollar, optimism around Fed pause

(.) * U.S. CPI a touch above expectations * South Korea shares hit over a week high * U.S. dollar falls By Rishav Chatterjee Sept 14 (Reuters) - Asian emerging currencies and stocks gained ground on Thursday as a falling greenback fuelled risk appetite, while U.S. inflation data created optimism around a rate hike pause from the Federal Reserve. The U.S. dollar index - measuring the currency against a basket of six developed-market peers, including the euro and yen - edged 0.16% lower to 104.56 in the Asian afternoon. Overnight data from the U.S. showed higher fuel prices had lifted headline consumer prices by the most in 14 months in August, for an annual rate of 3.7%, a touch above expectations. "We've seen the U.S. dollar peel back a bit, which is probably more reflective of a little volatility being priced out of the market after the CPI release," said Kyle Rodda, senior financial market analyst at Capital.com. Adding to this, Tony Sycamore, market analyst at IG Markets, said "inflation is low enough to keep the Fed on hold when it meets next week but still too far from the Fed's 2% inflation target to rule out a rate hike in November." ANZ analysts in a note said they viewed the Fed to be done with its tightening cycle, although there was some risk of further hikes. The South Korean won was the top gainer against the dollar, rising 0.4%, with the benchmark in Seoul adding 1.2% on strength from chip and battery makers. Shares in South Korea hit an over one-week high. South Korea's central bank said on Thursday it needs to make coordinated efforts to contain household debt, currently at levels that could undermine economic growth and financial stability. Stock markets also broadly climbed in the region, with equities in Japan and Philippines rising 1.4% and 0.6%, respectively. There is no need for the Philippine central bank to raise interest rates if there are no further supply shocks like those seen in August, its governor said on Thursday. The Singapore dollar gained about 0.1%, while stocks in its benchmark index jumped 0.6% to their highest level in more than a week. "Singapore's labour market report for the second quarter confirmed cooling labour market conditions, with tightness easing, as the ratio of job vacancies to unemployed persons dropped to 1.94 from last year’s peak of 2.57," said Chua Han Teng, economist at DBS Bank. The Chinese yuan was steady while stock markets in the country remained largely unchanged. Investors will now shift their focus to the European Central Bank (ECB) meeting later in the day, and its new inflation forecasts as Europe continues to face rising cost pressures coupled with soaring energy prices. "The risks around ECB event might be slightly underappreciated, too, with market pricing and economist forecasts implying a line-ball decision on whether the central bank hikes by 25 basis points or keeps rates unchanged," Capital.com's Rodda said. Asia stock indexes and currencies at 0626 GMT COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD % X S S YTD % DAILY % % Japan +0.22 -10.8 <.N2 1.41 27.11 9 25> China EC> India +0.02 -0.30 <.NS 0.07 10.93 EI> Indones +0.10 +1.40 <.JK 0.39 1.63 ia SE> Malaysi -0.04 -5.96 <.KL -0.14 -2.94 a SE> Philipp +0.07 -1.80 <.PS 0.59 -5.80 ines I> S.Korea 11> Singapo +0.14 -1.41 <.ST 0.63 -0.37 re I> Taiwan +0.21 -3.74 <.TW 1.36 18.88 II> Thailan -0.07 -3.15 <.SE 0.41 -7.61 d TI> HIGHLIGHTS: ** Thai consumer confidence rises in Aug after end of political uncertainty ** POLL-Indonesia's August trade surplus seen widening to $1.55 bln (Reporting by Rishav Chatterjee in Bengaluru; Editing by Jamie Freed and Sonia Cheema)