Ukraine's hryvnia currency rebounded on Friday from record dollar lows after the crisis-hit nation's central bank slapped a daily limit on cash withdrawals and reached out to the IMF amid simmering international tensions.
The fast-moving Ukrainian crisis weighed on many European stock markets, which pulled lower amid fears of a potential wider conflict in the region.
Investors also digested a mixed session in Asia after Federal Reserve chief Janet Yellen provided an upbeat view of the US economy -- and hinted the central bank could ease up on its stimulus taper if the growth outlook weakens.
In a crisis measure, Ukraine's central bank capped cash withdrawals to 15,000 hryvnia (1,095 euros, $1,400) per day, in the latest sign of the desperate state of national finances and a run on bank accounts.
The news came one day after Ukraine requested financial support from the International Monetary Fund (IMF), as Kiev struggles to emerge from a bloody political crisis amid heightened tensions with Russia.
The national hryvnia currency rose to 9.1800 against the dollar, having plunged to a historic low of 11.3075 on Thursday.
"Although the move by the central bank to limit foreign currency withdrawal seems to have propped up the currency, we think that the global show of support for Ukraine, especially from the US, and the IMF loan request are the bigger drivers of hryvnia strength today," said analyst Kathleen Brooks at trading site Forex.com.
"Capital controls tend to be currency negative, while having the US on your side when you face a formidable force like Russia is likely to have a bigger impact.
"A pullback from record lows versus the dollar is to be expected, especially now that imminent bankruptcy looks like it has been avoided."
UKRAINE SLAMS RUSSIAN INVASION
Kiev meanwhile on Friday accused Russia of staging an "armed invasion" of Crimea and appealed to the West to guarantee its territorial integrity after pro-Kremlin gunmen took control of the peninsula's main airport.
With this in mind, London's benchmark FTSE 100 stocks index fell 0.13 percent to stand at 6,801.10 points in midday deals. Frankfurt's DAX 30 shed 0.10 percent to 9,579.36 points and the Paris CAC 40 dipped 0.52 percent to 4,373.63.
"European markets are still in a consolidation pattern as optimism over the an accelerating global economy is currently being neutralised by uncertainty coming out of the Ukraine," said trader Markus Huber at London-based brokerage Peregrine & Black.
"In the United States, focus will be on revised Q4 GDP figures expected to be coming in much weaker than the first reading."
He added: "Towards the end of trading today ahead of the weekend it will be interesting to see who will keep the upper hand, with some (investors) possibly reducing their risk exposure due to the unrest in the Ukraine."
Elsewhere, the euro jumped to $1.3813 -- its highest level so far this year -- as stronger-than-expected eurozone inflation dampened talk of a rate hike next week from the European Central Bank (ECB).
That compared with a level of $1.3710 late in New York on Thursday.
Eurozone inflation stood at 0.8 percent in February from a year earlier, official data showed on Friday.
Market expectations had been for a reading of 0.7 percent.
"The higher-than-expected inflation numbers reduce the chances of an ECB rate cut at next week's meeting and we maintain the view that on balance the central bank will keep rates on hold," said ABN Amro economist Nick Kounis.
The European single currency rose to 82.50 British pence from 82.15 pence on Thursday. The pound gained to $1.6735 from $1.6688.
On the London Bullion Market, the price of gold fell to $1,328.16 an ounce from $1,332.25 on Thursday.