By Ragini Mathur and Purvi Agarwal

July 17 (Reuters) - Most emerging market currencies edged lower on Thursday, while stocks gained, as markets gauged uncertainty surrounding Federal Reserve Chair Jerome Powell's tenure and ongoing U.S. trade developments.

Global markets were rattled on Wednesday after reports said that U.S. President Donald Trump might fire Fed Chair Powell soon, but were later denied by Trump. However, he did not completely rule out the possibility.

Investors believed that Powell's replacement would have a more lenient stance on monetary policy in the world's largest economy, and that additional interest rate cuts would be possible this year.

The dollar index =USD, which tracks the U.S. dollar against a basket of major currencies, slid following the news, but bounced back from the declines to trade 0.3% higher on the day.

"The dollar has fallen so sharply this year that there's a lot of room for recovery, so when there's a reason to buy the dollar, people are really buying the dollar," said Kathleen Brooks, research director at trading platform XTB.

MSCI's global EM currency index .MIEM00000CUS edged 0.1% lower, with most currencies sliding against the greenback.

South Africa's rand ZAR= fell 0.5%, while the stocks .JTOPI were 0.2% higher. Investors were also monitoring the meeting of G20 finance chiefs in the country.

Turkey's Lira TRYTOM=D3 was little changed, while its stocks .XU100 gained 1%.

Most emerging European currencies edged lower against the euro, with the Hungarian forint EURHUF= dropping 0.3%, the most among regional peers.

Regional stocks were broadly higher, with those in Hungary .BUX and Romania .BETI up 0.7% and 1.4%, respectively, while Polish stocks were flat.

"We are seeing a mini relief rally today about Trump not firing Powell... a lot of the trust around the US government would be broken (otherwise)," said Brooks.

Still, MSCI's global EM stock gauge .MSCIEF was little changed.

Markets also found support in Trump's signals on the trade front, saying he is "very close" to a deal with India and could potentially reach an agreement with Europe. However, he noted it is too early to determine prospects for a Canada deal.

The U.S. has already secured agreements with the UK, China, Vietnam, and Indonesia, with several other nations in active negotiations ahead of the August 1 tariff deadline, with investors betting on more such deals.

HIGHLIGHTS:

** Emerging market ex-China equity funds' assets hit record high

** TSMC beats forecasts to post record quarterly profit of $13.5 billion

** Singapore's exports rise 13% annually in June, stronger than forecast

For TOP NEWS across emerging markets nTOPEMRG

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

(Reporting by Purvi Agarwal and Ragini Mathur in Bengaluru; Editing by Rashmi Aich)

((Ragini.Mathur@thomsonreuters.com;))