Forex Today: Safe-haven flows dominate markets to start the week

Here is what you need to know on Monday, February 28:

The greenback is capitalizing on safe-haven flows at the beginning of the week amid escalating geopolitical tensions. Over the weekend, the US and the EU along with other Western nations decided to exclude some Russian financial institutions from the global payment system, SWIFT. More worryingly, Russian President Vladimir Putin put deterrence forces, including nuclear arms, at the highest threat level. Later in the day, delegations from Russia and Ukraine are expected to meet for talks on the Ukraine-Belarus border. The US economic docket will feature the Chicago Purchasing Managers Index and Dallas Fed Manufacturing Business Index data for February but geopolitical headlines are likely to continue to drive the market action.

Reflecting the risk-averse market atmosphere, the US Dollar Index is up 0.7% near 97.20 early Monday, the benchmark 10-year US Treasury bond yield is down more than 3% at 1.9% and US stocks futures are down between 1.5% and 2.25%. The barrel of West Texas Intermediate is rising more than 5% near $97.00. Meanwhile, Belarus will reportedly send troops to support the Russian invasion and Ukrainian President Zelenskyy told the British Prime Minister Boris Johnson on Sunday that the next 24-hours was going to be a crucial period for his country. 

The Russian rouble has reportedly lost more than 40% against the dollar in the interbank market early Monday. In response, the central bank of Russia announced that it hiked the benchmark interest rate to 20%. “The rate hike is designed to offset increased risks of rouble depreciation and inflation," the central bank in a statement.

EUR/USD opened with a big bearish gap and was last seen trading near 1.1150, where it was down 1% on a daily basis. 

GBP/USD fell toward 1.3300 in the early trading hours of the Asian session on Monday but managed to recover a portion of its daily losses. At the time of press, the pair was down 0.3% on the day at 1.3365.

After closing the previous week in the negative territory below $1,900, gold surged higher early Monday and touched a daily top of $1,931 before retreating toward $1,910 into the European session.

USD/JPY is staying relatively quiet near 115.50 as the safe-haven Japanese yen holds its ground against the greenback.

Bitcoin extended its rebound to $40,000 on Saturday but suffered heavy losses toward the end of the weekend. BTC/USD lost nearly 4% on Sunday and was last seen consolidating its losses near $38,000. Ethereum fell more than 5% on Sunday after closing the previous three trading days in the positive territory and it's posting small daily losses at $2,600.