The U.S. dollar dipped below 3.60 Turkish liras as emerging market currencies rallied on Tuesday over growing anticipation that the U.S. Federal Reserve will gradually increase interest rates.

The lira was trading at 3.5930 to the US dollar, the lowest level since February 2017.

The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 percent to 100.35 after falling as low as 100.02 overnight, its lowest since Feb. 7.

The Fed lifted interest rates last week and said that its future course of hikes would be "gradual" which was less "hawkish" than many had expected.That pushed down U.S. Treasury yields, to the dollar's detriment.

The euro was steady on the day at $1.0741 but remained shy of last week's $1.0782.

Sterling edged up 0.1 percent to $1.2370, but remained well shy of its Monday high of $1.2436, its loftiest peak since Feb. 28, after Prime Minister Theresa May said she will trigger Britain's separation proceedings with the European Union on March 29, launching two years of Brexit negotiations.