* S.Africa's rand firms on upbeat GDP data
* S.Korean won hits peak since June
* Turkey's lira loses on higher oil prices
By Agamoni Ghosh and Aaron Saldanha
Dec 4 (Reuters) - Emerging market currencies gained against a soft dollar on Tuesday as U.S. Treasury yields slipped, while developing world shares steadied as a rally after the U.S.-China trade truce petered out.
The fall in U.S. treasury yields from a possible pause in the U.S. Federal Reserve's rate-hike cycle and an inversion in the U.S. yield curve for the first time in more than a decade spurred concerns about a possible recession.
Rising U.S. borrowing costs had reduced the attractiveness of riskier emerging market assets earlier this year, leading to capital flows out of many developing countries, but a dovish stance from the Fed last month sent emerging market currencies and shares to 2018-highs in November.
"One of the reasons why emerging markets sold off this year was because of rising rates in the U.S. and increasing Treasury yields. That (lower U.S. yields) in theory should provide a bit of a lifeline to emerging markets," said Gareth Leather, senior economist at Capital Economics.
Most developing world currencies gained, with the Chinese yuan leading the rally, up 0.7 percent and South Korea's won hitting its highest since June.
South Africa's rand firmed more than 1 percent, hovering near four-month highs.
Africa's most industrialised economy expanded 2.2 percent in the third quarter, snapping out of recession after a revised 0.4 percent contraction in the second quarter, data showed.
The Russian rouble and stocks on Moscow's main index firmed on higher oil prices before this week's Organization of Petroleum Exporting Countries (OPEC) meeting, while investors kept an eye on naval tensions between Moscow and Kiev.
Currencies of net crude importers such as the Turkish lira, , India's rupee and the Indonesian rupiah slipped, as oil prices rose by more than 1 percent.
In equities, the MSCI's index for emerging market shares rose marginally with China and Hong Kong stocks losing steam as the U.S.-China rally faded and as the Chinese economy continues to slow down.
Analysts say the 90-day U.S.-China trade truce has only bought a bit more time for wrangling over deeply divisive trade and policy differences.
"Our global forecasts point to the trade war intensifying and sort of re-escalating next year ... so you may get a short term rebound but it is not likely to last that long," said Capital Economics' Leather.
In Eastern Europe, the Czech crown gained marginally against the euro. Data showed the average real monthly wage in the country rose in the third quarter. For GRAPHIC on emerging market FX performance 2018, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2018, see tmsnrt.rs/2OusNdX
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