EMERGING MARKETS-EMEA currencies muted on dollar strength, while stocks dip

* Czech crown flat ahead of c.bank meeting

* EMEA stocks rise, while MSCI EM stocks index falls

* Chinese stocks sink on liquidity concerns

By Ambar Warrick

Feb 4 (Reuters) - South Africa's rand fell on Thursday, while most other emerging market currencies in Europe, the Middle East and Africa were little changed as recent signs of strength in the U.S. economy drove buying into the dollar.

Increasing optimism over the U.S. economy and a bumper COVID-19 stimulus package attracted investors to the U.S. dollar, pressuring most currencies in emerging markets.

Employment data due this week is also expected to set the tone for dollar flows in the coming weeks.

South Africa's rand fell 0.4% to the dollar, while Turkey's lira and the Russian rouble gained slightly.

"This (dollar) recovery rally has caught many traders by surprise and some are questioning whether the rules have changed. Whether the dollar's strength is to be short-lived or a longer-lasting theme remains to be seen. But fundamentals now appear to be on its side," Hussein Sayed, Chief Market Strategist at FXTM, wrote in a note.

Emerging markets had started the week on a strong note as optimism over a global economic recovery grew. But relative weakness in the dollar, coupled with increasing signs of a U.S. economic bounceback, drove investors to the greenback, despite its status as a safe-haven.

The Czech crown was largely unchanged to the euro ahead of a central bank interest rate decision later in the day. While the bank is expected to hold policy, it could signal future tightening after stronger-than-expected growth in the Czech economy.

The crown has outpaced its central European peers the Hungarian forint and the Polish zloty this year.

Most EMEA currencies rose against the euro, which continued to drop on concerns over sluggish economic growth, as well as recent comments from the European Central Bank that suggested future action to stifle strength in the currency.

Emerging market stocks retreated, with the MSCI's equity index shedding 0.5% after three consecutive days of gains.

Chinese stocks were among the top drags on the index on continued concerns China could switch to a tighter monetary policy stance and bring down liquidity, as short-term funding costs began to rise.

Most EMEA stocks rose on Thursday. For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX

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For RUSSIAN market report, see (Reporting by Ambar Warrick in Bengaluru; Editing by Krishna Chandra Eluri)