The rouble plunged to a record low on Monday and the dollar soared against most peers after Western nations announced.
Fresh sanctions to punish Russia for its invasion of Ukraine, and President Vladimir Putin put its nuclear forces on high alert.
The rouble dropped to as low as 119 per dollar in early trading, tumbling beyond its previous low of 90 roubles per dollar. It was last at 109.
The declines came despite Russia's central bank announcing a slew of steps on Sunday to support domestic.
Markets after Western allies ratcheted up sanctions including blocking certain banks from the SWIFT international payments system.
Restrictive measures on the Bank of Russia were also imposed to prevent it from deploying its international reserves to undermine sanctions.
Adding to nerves, Putin put Russia's "deterrence forces" - which wield nuclear weapons - on high alert.
Elsewhere, the euro tumbled 1.1% to $1.1148. It was also down 1% on both the yen and the Swiss franc.
However, the dollar was the main beneficiary of the tension around Ukraine. The dollar index, which measures the currency against six peers, was up 0.83% at 97.368.
The greenback even gained a fraction on the yen, which was at 115.53 per dollar.
"In the near term we think the dollar faces a risk of pushing above the 97.47 resistance level," said Carol Kong, an FX strategist at Commonwealth Bank of Australia (OTC: CMWAY).
She said the extent of the dollar's gains would depend on any further leap in volatility, the size of the sell-off in global equities, and assessments of central banks' tightening programs.
She noted that high energy prices were capping the yen, given Japan imports the bulk of its energy requirements.
Markets are now pricing in a 95% chance the U.S. Federal Reserve will hike rates by 25 basis points at its March meeting.
According to CME's Fed Watch tool, with the invasion having put an end to speculation that the Fed will jump in with a 50 basis point hike.
Investors also believe the war will deter the European Central Bank from any strong tightening moves in the near term.
The Australian dollar slid 0.72% to $0.7180, the New Zealand dollar sank 0.76% to $0.6685, and the sterling was slightly weaker at $1.335.
A top official at the Reserve Bank of New Zealand told Reuters in an interview it is too early to assess what impact.
If any, the Russian invasion of Ukraine might have on policy, and it has more work to do on interest rates to control inflation.
Trending News
U.S. Allies Target Fortress Russia With New Sanctions Including SWIFT Ban!
EU, UK, Canada, US Committed To Removing Russian Banks From SWIFT!
Stock Futures Fall After A Stunning Comeback As Investors Assess Fighting In Ukraine!
In cryptocurrency markets, bitcoin was in the middle of its recent range, trading just below $38,000. - INVESTING
