The Russian ruble fell to a record low against the dollar and euro. The dollar hit an all-time peak near 36.68 rubles, with the euro also touching a record high of 50.53.
Ukraine said Russia was building up armored vehicles on its side of a narrow stretch of water closest to Crimea after Russian President Vladimir Putin declared at the weekend he had the right to invade his neighbor to protect Russian interests and citizens.
The Russian central bank, meanwhile, confirmed on Monday it has increased its involvement in the currency market after the ruble plummeted and said it will continue to shift its main monetary policy focus to inflation targeting after the situation on markets stabilizes.
Traders estimated the central bank sold in excess of $10 billion on Monday to prop up the ruble.
In midday trading, the dollar was up nearly 1.5 percent versus the Russian currency around 36.60, while the euro rose about 1.2 percent to 50.35.
The United States threatened to isolate Russia economically after Putin's action provoked what Britain's foreign minister called "the biggest crisis in Europe in the twenty-first century".
In midday trading, the dollar index rose around 0.3 percent close to 79.95.
The dollar was also underpinned by data showing U.S. consumer spending rose more than expected in January, increasing 0.4 percent, as outlays on services recorded their largest increase since late 2001, likely driven by demand for heating.
Income also gained 0.3 percent in January after being flat the prior month.
The dollar's gains pushed the euro almost 0.3 percent lower at $1.38.
However against the safe-haven yen, the dollar fell 0.4 percent to 101.43, after earlier dropping to a month-low of 101.17 yen. The euro also dropped versus the yen, falling 0.6 percent to 139.67 yen.
The euro is the first safe port of call for capital from eastern European countries such as Poland, Latvia or Lithuania who may be the first to feel the fallout of any conflict or sanctions. But the euro zone also has close ties to Russia.
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