MSCI's index for emerging market currencies fell to an over 1-week low, with Turkey's lira leading declines as the dollar index gained for three consecutive sessions, mainly due to a weaker euro.

Despite a dovish tone from the US Federal Reserve last week, the dollar has stayed resilient after sets of economic data, including strong payroll and lower trade deficit, pointed to strength in the world's largest economy.

"The USD continues its march higher amid market closures in Asia and strong payroll data last Friday," Maybank analysts said in a note.

"Growth divergence between US and EU continues to favour the US, supportive of the USD," the note added.

South Africa's rand fell to a one-week low as a strong dollar put the currency on the back foot ahead of President Cyril Ramaphosa's state of the nation address on Thursday evening.

In Asia, trading volumes remained low with China closed for the week-long Lunar New Year celebrations but the South Korean won, which began trading after a three-day holiday, fell 0.5 percent.

The Indian rupee steadied after the central bank surprised with an interest rate cut, shifting its stance to "neutral" to boost a slowing economy after a sharp slide in the inflation rate.

This was the first rate cut helmed by new Governor Shaktikanta Das and welcome news for Prime Minister Narendra Modi's government, which wants to boost lending and lift growth as it faces nationwide elections by May.

"The rates market was not pricing in any move ... it did catch the market by surprise as to how swiftly the new governor acted," said Commerzbank analysts in a note.

In stocks, MSCI's index for emerging market shares fell 0.3 percent as key indexes outside Asia slipped, including those in Turkey and South Africa.

Russian stocks were down, tracing moves in oil prices, while the rouble weakened below a one-week low on pressure from the dollar and profit-taking in the local market after a rally in government bonds.

In emerging Europe, the Czech crown was trading near its weakest level this year against the euro ahead of the central bank's rate-setting meeting in Prague where officials are expected to keep rates on hold.

Romania's leu firmed, bucking a weakening of its main regional peers as speculation that the central bank could change the way interbank interest rates are calculated remained high.