The currency later regained some ground to trade at US66.80c.
"As soon as the news broke that a full-scale invasion was underway, all the risk markets globally just tanked, taking the kiwi with it," ANZ senior strategist David Croy said.
"Ukraine is front and centre in terms of the financial markets right now," he said.
"The market is just reacting from headline to headline with the ebb and flow of global sentiment," he said.
The New Zealand share market's S&P/NZX50 Index dropped 401 points or 3.3 per cent yesterday, driven by some heavy selling near the close.
Wall Street and European stocks fell, but a televised address from US President Joe Biden, which outlined widespread sanctions against Russia, saw US stocks rebound.
The sanctions include penalties on Russian banks, billionaires and high-tech imports.
However, the penalties do not directly target Russia's oil-and-gas industry nor will they cut Russian banks off from the crucial Swift payment network that connects financial institutions around the world.
Bond yields in the US and around the word, which had been gaining on the back of expected interest rate tightening, suddenly went into reverse.
The influential US 10-year Treasury yield dropped to 1.96 per cent from 2.05 per cent before news of the invasion.
Harbour Asset Management portfolio manager Shane Solly expected rocky trade to continue this session but said the defensive nature of the local market might see it hold up relatively well.
Solly said: "Clearly someone had hit the eject button - a lot of the damage was done yesterday."
Kiwibank said the Russia/Ukraine situation would complicate the European Central Bank's plans to tighten monetary policy, with various firms now under strain from what sanctions on Russia will mean for them from a growth perspective.
The US Dollar has surged higher, as a safe haven currency, as have the yen and Swiss franc.
The volatility index, or VIX, got to a high of 37 but is now back to 31.
For context, it got up to 85 at the start of the Covid-19 pandemic, the bank said.
Global commodity prices have soared on the expected supply disruptions, particularly oil and gas markets, but also some of the soft commodities Russia exports.
Brent crude prices are up 5.3 per cent to US$102/barrel, the highest since 2014.
European natural gas prices are up 50 per cent after Germany cancelled the Nord Stream 2 gas pipeline from Russia.
ASB Bank said among the soft commodities, corn and wheat have outperformed, which may have implications for dairy prices down the line.
