By Chuck Mikolajczak

NEW YORK (Reuters) – The U.S. dollar jumped to its highest level in nearly two years and the Russian rouble plunged to a record low on Thursday after Russia launched an invasion of Ukraine, as investors fled risk assets and moved toward safe-haven assets.

Russian forces invaded Ukraine in an assault by land, sea and air, in the biggest attack on a European country since World War Two.

The dollar index rose 0.869% and was on pace for its biggest daily percentage gain since March 2020, when U.S, markets were in the throes of the first wave of the COVID-19 pandemic. The greenback reached a high of 97.740 against a basket of major currencies, its highest since June 30, 2020.

The dollar weakened slightly as U.S. President Joe Biden announced new sanctions against Russia, including banks.

“We have a big geopolitical development that a lot of people haven’t seen before in their lives; it’s a classic risk-off move,” said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull Inc in Toronto.

“There is a push and pull over which currency is the biggest safe haven in the moment.”

The Russian rouble weakened 4.51% versus the greenback to 84.96 per dollar after softening to a record low of 89.986 per dollar.

Against other safe havens, the dollar rose 0.77% against the Swiss franc while the Japanese yen weakened 0.54% versus the greenback at 115.61 per dollar.

The greenback also gained sharply against other European currencies such as the Swedish crown, Hungarian forint and Polish zloty.

The Swedish crown fell 1.13% versus the U.S. currency to 9.49 per dollar.

The dollar rose 2.85% against the zloty and rose 3.11% against the forint.

The euro was down 0.95% to $1.1202 while Sterling was last trading at $1.3393, down 1.10% on the day.

The greenback has been subdued recently as tensions in Ukraine have increased and fueled speculation the U.S. 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 dropped to 7.5% from around 34% a day ago, according to CME’s FedWatch Tool

Fed policymakers on Thursday acknowledged the central bank’s tightening plans were now jousting with the possibility of war and its impact on oil prices.

In cryptocurrencies, bitcoin last fell 1.22% to $37,067.89.

“In the end, if you want to talk about the safety trade, as much as everyone likes to say bitcoin is great, push comes to shove, people want gold,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

Ethereum last fell 2.21% to $2,560.77.

(Reporting by Chuck Mikolajczak; editing by Jonathan Oatis)