By Tom Westbrook

SINGAPORE, March 18 (Reuters) - Hong Kong shares rose to three-year highs and led Asian markets higher on Tuesday, as investors turn positive on the outlook for the world's second-biggest economy and cheered recent data and promises to further support consumption.

The Hang Seng .HSI was up 2% in morning trade and its 23% year-to-date gain is easily the largest of any major market.

Short sellers rushed to cover bets against the New Zealand dollar NZD=D3, which is sensitive to China's consumer via food exports, sending it to a three-month high of $0.5827. NZD/

The China-sensitive Australian dollar AUD=D3 hit a one-month high just shy of $0.64 and China's yuan CNY=CFXS hovered near its strongest levels of the year so far. CNY/

On Monday the OECD forecast U.S. President Donald Trump's higher tariffs will drag down growth in Canada, Mexico and the U.S. while driving up inflation.

Yet China has been an unlikely winner of Trump's burst of tariffs and cuts to government spending in his first two months in office, as fears of a U.S. slowdown turn investors abroad.

"Momentum and sentiment (is) shifting now as well in a positive way," said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.

On Sunday China announced childcare subsidies and a "special action plan" to boost domestic consumption and on Monday data showed retail sales growth quickened in January-February. Trump said Chinese President Xi Jinping may visit the U.S. in the not-too-distant future, further raising expectations that some sort of breakthrough deal could reduce tariffs.

The Hong Kong dollar HKD=D3 is parked in the strong half of its trading band against the dollar and Hong Kong interbank rates HIBOR= have been falling lately, pointing to the weight of money pouring into the financial hub.

Mainland shares .SSEC made more modest gains, while MSCI's broadest index of Asia-Pacific stocks rose 1% with markets in Seoul .KS11, Sydney .AXJO and Taipei .TWII also higher.

Japan's Nikkei .N225 bounced 1.5%, putting it on course for its sharpest rise in three weeks. .T

Overnight on Wall Street stocks stabilised but the mood remains fragile leading into April, when Trump's threatened reciprocal tariffs are set to take effect. .N

Softer-than-expected retail sales and factory activity figures kept downward pressure on the U.S. dollar and on U.S. yields, opening further gains for gold. GOL/

Gold XAU= marked a record high at $3,005 an ounce in the Asia morning. The euro EUR=EBS was firm above $1.09 and sterling GBP=D3, which touched a four-month top overnight, traded a whisker short of $1.30. GBP/

Ten-year Treasury yields US10YT=RR were steady at 4.293%. US/

Ahead in the day a German economic survey is due, though markets' focus is on the U.S. Federal Reserve, which concludes a two-day meeting on Wednesday, and the outcome of a phone call between Trump and Russian President Vladimir Putin.

Trump said he would talk to Putin about ending the Ukraine war - a prospect which has pushed down on European gas prices TRNLTTFMc1 and sent the euro rallying in recent weeks.

(Reporting by Tom WestbrookEditing by Shri Navaratnam)

((tom.westbrook@tr.com; +65 6973 8284;))