A picture illustration of U.S. dollar, Swiss Franc, British pound and Euro bank notes, taken in Warsaw January 26, 2011.
A picture illustration of U.S. dollar, Swiss Franc, British pound and Euro bank notes, taken in Warsaw January 26, 2011. Reuters / Kacper Pempel

The U.S. dollar was little changed in choppy trading on Wednesday as investors digested the latest developments in the Ukrainian crisis after a host of countries announced sanctions against Russia for ordering troops into separatist regions of its neighbor.

The United States and allies unveiled more sanctions against Russia, with European Union measures poised to take effect on Wednesday, while Russia's TASS news agency reported Moscow has started evacuating diplomatic staff from all of its missions in Ukraine.

The greenback has been subdued recently as tensions in Ukraine have increased, fueling speculation that 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 dipped to about 37% from around 45% a week ago, according to CME's FedWatch Tool.

"Today is just a little bit of a calm in FX where you are just seeing investors in more of a wait-and-see mode," said Edward Moya, senior market analyst at Oanda in New York.

"It just seemed that this market has gone overboard in pricing in aggressive Fed tightening that now it seems that you are seeing a little bit more of a pullback in those expectations."

The dollar index rose 0.007%, with the euro down 0.03% to $1.1322.

The Russian rouble weakened 2.09% versus the greenback at 80.69 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 0.71% versus the greenback at $0.678.

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 were up more than 1% on the day.

The Canadian dollar rose 0.42% versus the greenback to 1.27 per dollar while the Australian dollar was up 0.42% versus the greenback at $0.725.

The Japanese yen strengthened 0.01% versus the greenback at 115.05 per dollar, while Sterling was last trading at $1.3559, down 0.17% on the day.

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, and last strengthened 0.1% versus the greenback at 6.3131 per dollar.

The greenback rose 0.26% versus the Swedish crown at 9.35 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.