* EM stocks set for best day in a month
* Lira eyes worst weekly decline since late Aug
* Oil jump helps Russia's rouble
By Sruthi Shankar
Oct 11 (Reuters) - Hopes of a breakthrough in U.S.-China trade talks put emerging- market stocks on course for their biggest percentage gain in a month on Friday, while South Africa's rand, the Korean won and the Chinese yuan all gained as the dollar weakened.
Chinese stocks enjoyed their best weekly gain in five weeks after U.S. President Donald Trump on Thursday called the first day of trade talks with China in over two months "very, very good".
The MSCI index of developing world stocks jumped 1% and the trade-sensitive stocks of South Korea, Hong Kong and India rallied.
China's yuan strengthened by 0.2%, with investors watching out for a potential currency pact between the two sides, following a Bloomberg report that it could form part of a deal to suspend further tariff hikes.
"A lot of these moves are being driven by the newsflow on trade talks," said William Jackson, chief emerging-market economist at Capital Economics in London. "We're sceptical any of this may mark a major breakthrough in trade negotiations.
Trump is set to meet China's top trade negotiator, Vice Premier Liu He, on Friday as part of high-level negotiations. Both sides have imposed tariffs on hundreds of billions of dollars of goods during the 15-month trade dispute, which has shaken financial markets.
The Turkish lira slid 0.35% as U.S. lawmakers said they would introduce legislation to impose sanctions against Turkey following its assault on Kurdish forces in Syria. Turkish Foreign Minister Mevlut Cavusoglu promised retaliation.
The lira was on track for its biggest weekly decline since late August, with data showing Turkey's current account surplus in August widened to $2.604 billion, below Reuters' forecast of $2.775 billion.
A 2% jump in oil prices after Iranian news agencies reported an attack on a state-owned oil tanker helped the currencies of major crude exporters such as Russia and Mexico. Their currencies gained 0.4% and 0.2%, respectively.
The rouble's gains came even as Russian Central Bank Governor Elvira Nabiullina said the central bank will be able to cut interest rates faster than expected as inflation slows.
Conversely, currencies of countries that are net importers of crude such as India, Turkey and Indonesia came under pressure.
Politics dominated moves in eastern Europe, with the Romanian leu holding flat after reaching a week low versus the euro following the collapse of Prime Minister Viorica Dancila's centre-left government, which lost a no-confidence vote in parliament on Thursday.
The Polish zloty rose to a two-month high, recovering from September lows, as poll showed the ruling Law and Justice party had the highest support before parliamentary elections on Sunday.
For GRAPHIC on emerging market FX performance 2019, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2019, see https://tmsnrt.rs/2OusNdX
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For CENTRAL EUROPE market report, see
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For RUSSIAN market report, see (Reporting by Sruthi Shankar in Bengaluru, editing by Larry King)