NEW YORK, Feb 24 ― The US dollar edged higher yesterday as the latest developments in the Ukrainian crisis dented investor appetite for risk, as a sell-off in the equity market helped drive a safe-haven bid for the greenback.

After spending the early part of the day lower, the dollar began to strengthen as the situation in Ukraine intensified and US stocks gave up initial gains, and the US State Department said a full-scale Russian invasion of Ukraine remains potentially imminent.

The United States and allies unveiled more sanctions against Russia, with European Union measures taking effect on Wednesday. Ukraine declared a state of emergency and told its citizens in Russia to come home, while Moscow began evacuating its Kyiv embassy.

The greenback has been subdued recently as tensions in Ukraine have increased, fuelling speculation that the US Federal Reserve may be less aggressive in tightening policy at its March meeting. Expectations for at least a 50-basis-point interest rate hike have dipped to about 31 per cent from around 45 per cent a week ago, according to CME's FedWatch Tool.

"Given the current environment, I anticipate the Fed is going to become a little bit more cautious,” said Edward Moya, senior market analyst at Oanda in New York.

"You are also seeing geopolitical tensions are going to keep risk aversion the go-to trade so any rebounds in risk are going to be faded.”

The dollar index rose 0.161 per cent, with the euro down 0.21 per cent to US$1.1301 (RM4.73).

The Russian rouble weakened 2.70 per cent versus the greenback at 81.13 after reaching 81.392 per dollar, giving back gains made on Tuesday.

The New Zealand dollar jumped after the Reserve Bank of New Zealand raised interest rates and said more tightening could be necessary. The kiwi last was up 0.59 per cent versus the greenback at US$0.677.

The rise in the New Zealand dollar, along with climbing crude prices, also helped other commodity-linked currencies such as the Canadian dollar and Australian dollar. Both Brent and West Texas Intermediate CLc1 were up more than 1 per cent on the day.

The Canadian dollar rose 0.22 per cent versus the greenback to 1.27 per dollar while the Australian dollar rose 0.17 per cent versus the greenback at US$0.723.

The dollar was softer against other safe havens, however, such as the Japanese yen, which strengthened 0.05 per cent versus the greenback to 115.01 per dollar, while the dollar fell 0.34 per cent versus the Swiss franc at US$0.918.

China's yuan touched a fresh four-year high against the dollar, amid signs the escalating Russia-Ukraine crisis is boosting foreign demand for Chinese assets. The greenback fell 0.17 per cent versus the yuan to US$6.312 per dollar.

The greenback rose 0.69 per cent versus the Swedish crown to 9.39 per dollar after the Riksbank’s Deputy Governor Martin Floden said on Monday the central bank was unlikely to raise rates in the coming year or so.

In cryptocurrencies, bitcoin last fell 0.75 per cent to US$37,601.00. ― Reuters