The U.S. dollar edged lower against a basket of currencies on Tuesday, in choppy trading as the unfolding situation in Ukraine after Russian President Vladimir Putin recognized the independence of two separate Ukrainian regions and ordered the dispatch of troops to them. The Kremlin said it remained open to diplomacy with the United States and other countries as it faced actions from multiple countries. Britain has released a sanctions list and Germany has suspended certification of the Nord Stream 2 Baltic gas pipeline project, which is expected to significantly increase supplies of Russian gas.

The U.S. dollar index fell 0.04% to 96.08 in volatile intraday trading, rising 0.1% at one point and tumbling 0.3% at one point. U.S. President Joe Biden announced the first wave of sanctions against Russia, while expressing hope that diplomacy remains in place. The dollar then weakened slightly. U.S. business activity rebounded in February as the drag from a surge in Omicron cases faded, data from IHS Markit showed. However, other data showed that U.S. consumer confidence fell for a second straight month in February.

The euro climbed 0.18% to $1.1327, recovering after hitting its lowest since Feb. 14 earlier, partly on hopes for dialogue and economic data showing German business sentiment improved in February across all sectors, reaching The highest level since August. Joseph Trevisani, senior analyst at FXStreet.com, said Putin was leading the show, but the market didn't react like a real fear that the situation could develop into an irreversible escalation that would eventually lead to sanctions that would damage the economy, or at least the global recovery. It's up in the air, and the market knows it; they don't see it as a sign of a major change in the situation.

Sterling was last at 1.3586 against the dollar in New York, down 0.13% on the day. USD/JPY was up 0.31% at 115.09; USD/CHF was up 0.64% at 0.9217.

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