Nov 11 (Reuters) – Emerging market stocks soared 4.8% on Friday, heading for their best week in two years, as China eased some COVID curbs and soft U.S. inflation data cooled bets of another super-sized interest rate hike from the Federal Reserve.

Currencies also rallied, with the MSCI’s emerging markets currencies index .MSIEM00000CUS up 1.6%, led by strong gains in Asian currencies as the dollar stayed weak after data on Thursday showed U.S. inflation cooled more than expected in October.

Bets for a 50 basis points hike from the Fed rose to 70%, easing fears of a fifth 75 bps hike of the year in December.

China’s yuan CNY= jumped 1%, while South Korea’s won KRW= rallied 2%. South Africa’s rand ZAR= hit two-month highs, extending gains after jumping more than 2% on Thursday following the U.S. data.

“It is a good reason, some real hard data to hang on to for adjusting expectations in a slightly more dovish direction,” said Cristian Maggio, head of portfolio strategy at TD Securities.

The EM currencies index was on course to gain around 2.3% for the week – its best in seven years.

Adding to optimism was China easing some of its heavy-handed COVID rules.

China’s stringent COVID curbs have been a global concern as it hit the country’s economic growth, clouding the outlook for Asian neighbours and some Latin American economies that depend on commodities demand from the world’s second-largest economy.

Chinese blue-chips .CSI300 jumped 2.8%, while Hong Kong’s benchmark zoomed 7.7% to its best session in eight months.

South Korean .KS11 and Taiwanese stocks .TWII added more than 3% each. Elsewhere, South African stocks .JTOPI surged 4.2% to hit their highest since April, while some central European bourses jumped more than 2%.

The broad EM stocks index .MSCIEF was seen ending the week around 5.3% higher.

The news offers some much needed relief to investors who were growing increasingly nervous abut a global recession, given China’s curbs and aggressive central bank tightening by major central banks.

Sitting out Friday’s rally were the Indian rupee INR= and Turkish lira TRY=.

Rating agency Moody’s on Friday cut India’s growth projections for the current and next calendar year due to higher inflation, high interest rates and slowing global growth.

In Turkey, data sets showed industrial production barely expanded in September, while the current account deficit widened more than expected.

For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX

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(Reporting by Susan Mathew in Bengaluru; Editing by Devika Syamnath)