are convinced that the Fed will have to start tapering at some point and that has made it much harder for emerging market countries to attract foreign funds.
"Weakness in several key high-yielding emerging markets is overflowing to the rest," noted analysts at Barclays. "Higher volatility will benefit countries with better balance sheets and low currency vulnerability."
As a result they recommend a North-South rotation strategy -- going long in Korea, China and Singapore, and underweight in Malaysia, Thailand and Indonesia.
The Indian rupee cratered to a record low of 64.13 per dollar on Tuesday, while Indonesia's rupiah was at its lowest since 2009. Late on Tuesday, India's central bank took steps to support the beaten-down bond market, in moves that might just help prop up the rupee.
Among the major currencies, safe-haven flows were tending to favor the yen and Swiss franc over the U.S. dollar. Traders also reported much talk that European investors were repatriating funds from emerging markets, which was one reason the euro spiked higher across the board.
The single currency was up at $1.3425, having touched a six-month high of $1.3452 in New York. The dollar also slipped to 97.20 yen and took a sharp spill on the Swiss franc to 0.9163.
Commodities markets were mixed before the Fed release, with copper futures dipping 0.3 percent to $7,295.25 a ton. Spot gold was steadier at $1,372.01 but still off a two-month high set on Monday. Brent crude prices eased 39 cents to $109.76 a barrel, while U.S. oil for October delivery lost 23 cents to $104.88.