Emerging market stocks rose on Tuesday, following an upbeat handover form Wall Street on economic recovery hopes, while currencies made muted moves with all eyes on the U.S. Federal Reserves policy decision.

MSCIs index of emerging market shares was up 0.6 as U.S. treasury yields retreated, with most main indexes across Asia in the black. Turkeys BIST rose 0.4 while Russias MOEX scaled record highs before retreating 0.5.

Hungarys main index hit twoweek highs while Polish stocks added 0.3.

These moves come after the SP 500 and Dow Jones Industrial Average closed at record highs on Monday.

The dollar was steady with investors making cautious moves ahead of the Feds decision due on Wednesday. Communication from the central bank has indicated that it will maintain its accommodative stance till the economy gets on a path to sustained recovery.

Some bond complacency has crept into markets overnight and that they are assuming that the Fed will calm the inflationary waters. There is a genuine danger that the Fed disappoints the street, said Jeffrey Halley, senior market analyst, Asia Pacific, OANDA.

If the Fed doesnt play ball this week, another U.S. yield spike is on the way; the dollar will rise, Asian currencies with dirty dollar pegs will break into a cold sweat, and richly priced 2020 equity darlings may join them.

EM currencies made small moves with declining oil prices pushing crude exporter Russias rouble off eightmonth highs against the greenback to trade flat….