* MSCI EM FX index set for biggest wkly rise since July 2017
* MSCI EM stocks index dips 0.2%, following three days of gains
* Russian rouble slips following oil-fuelled jump on Thursday
* S.African rand softer after Ramaphosa address
By Aaron Saldanha
June 21 (Reuters) - Emerging market currencies consolidated gains against the dollar on Friday, on track for their biggest weekly rise in close to two years but stocks snapped a three-day winning streak on concerns over U.S.-Iran tensions.
A more dovish than expected U.S. Federal Reserve outlook on Wednesday boosted appetite this week for developing world assets, starkly contrasting with 2018, when a slew of U.S. rate hikes drained capital from emerging markets.
"It's been a massive week for obvious reasons, in terms of the Fed being even more dovish than what people thought they could be," said Stuart Ritson, head of Asian rates & FX at Aviva Investors.
"Already rates markets were performing really well, with yields moving lower globally...what has changed post-Fed is EM currencies have sparked to life," Ritson said. He noted that currencies were contributing more to returns this week than they have been recently, whereas rates have generally provided the lion's share of profits.
MSCI's emerging market currencies index was on track to rack up a 1.2% gain for the week, its biggest weekly rise since July 2017.
The MSCI's developing world stocks index dipped 0.2% as rising U.S.-Iran tensions took the edge off the Fed-fuelled rally, but was still set for a 3.6% weekly gain.
China's yuan softened in onshore trade. Chinese stocks added 0.5% on the day, while South Korean equities declined 0.3%.
Turkey's lira was 0.8% softer, while stocks fell 0.3%. The country's disagreements with the United States over buying a Russian defence system show no signs of easing.
Russia's rouble traded softer after firming 1.4% on Thursday to its strongest level since August 2018, in sympathy with Brent crude futures, which spiked on rising U.S.-Iran tensions.
Moscow-traded stocks slipped 0.4%, ceding some of Thursday's 0.8% gain.
South Africa's rand weakened 0.7% while equities fell 0.1%. Some analysts said President Cyril Ramaphosa's state of the nation address on Thursday lacked detail on how he plans to fix the ailing economy.
In Europe, Poland's zloty was 0.2% weaker against the euro, retreating from an about 13-month closing peak notched on Thursday.
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For RUSSIAN market report, see (Reporting by Aaron Saldanha in Bengaluru; editing by Emelia Sithole-Matarise)