TOKYO: The euro sank to a three-week low to the safe-haven dollar on Thursday while riskier commodity-linked currencies like the Australian dollar weakened amid intensifying fears that a full-scale Russian invasion of Ukraine was imminent.

The rouble held near a two-year trough, sterling touched its weakest level in more than a week, and bitcoin sank to a one-month low after Russian President Vladimir Putin said he had authorised military action in Ukraine's breakaway region of Donbass.

Markets had already been put on alert after US Secretary or State Antony Blinken told NBC he believed a full-scale Russian invasion could be imminent.

The euro fell as much as 0.35% to $1.1265, the lowest level since Feb. 3.

Against other traditional haven currencies, the euro declined as much as 0.48% to 129.40 yen and as much as 0.38% to 1.0340 Swiss franc.

The Australian dollar dropped as much as 0.62% to $0.7187 and the New Zealand dollar slid as much as 0.64% to $0.6730.

"The situation certainly looks like it's going to get worse before it gets better, and that means the commodity currencies can weaken," said Joseph Capurso, a strategist at Commonwealth Bank of Australia.

"If things get real bad," Aussie could test $0.70, and if the euro sinks below support at $1.1235, "it can fall quite a bit more," he said.

Euro edges higher, but focus still on Ukraine

The rouble held its ground near its weakest level since March 2020 at 81.5710 per dollar, last trading at 81.1505.

Sterling slipped as much as 0.17% to $1.3522, the lowest since Feb. 15.

The US dollar index, which gauges the greenback against six major peers, rose as much as 0.28% to 96.451 for the first time since Feb. 1.

Beyond its status as a safe haven, the dollar has been buoyed by expectations for the Federal Reserve to start a rate hiking campaign next month, with traders pricing 1-in-4 odds of a half-point increase, despite rising Ukraine risks.

In cryptocurrencies, bitcoin tumbled as much as 5.57% to $35,197.44, a level not seen since Jan. 24. Smaller rival ether dropped as much as 5.24% to $2,442.00, the weakest since Jan. 28.

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