• As geopolitical anxiety remains high, the pair dropped to below 1.3600 during the US session.

• This kept USD in demand, and negated opposition to a Fed Williams 50bps rate increase for March.

GBP/USD failed to make it out of the top of its range of 1.3500-1.3650ish that had prevailed for most February, with the pair ultimately falling below the 1.3600 level during US trading. The violence in Eastern Ukraine escalated on Thursday, which weighed on macro sentiment. Russia continues to build troops near Ukraine's borders despite earlier pledges to withdraw partially. This means that the safe-haven US Dollar gained against most G10 counterparts, such as sterling.

The range play for GBP/USD is likely to make sense as traders continue to evaluate the rapidly-moving Ukraine situation. Although the strong January UK Retail Sales data was released in Friday's European session it did not show that the UK consumer had a good start to 2022. Economists are still worried about the April rise in energy and tax costs that could impact consumer budgets, and possibly slow down growth.

On Friday, several Fed members reached the wires. The most memorable moment was John Williams, NY Fed President. Williams stated that there wasn't any compelling reason to take a "big move" (read: 50bps rate increase) at the beginning of lift-off. The money market-implied probability of the Fed raising rates 50bps at its March meeting dropped sharply to 21% from 50% a week ago. This "should" have had a negative impact on the dollar. However, Fed talk and US data this week has had a less significant influence on markets than usual due to so much attention on geopolitics.

This will likely continue for the next week with a crucial face-to-face meeting between US Secretary Anthony Blinken, Russian Foreign Minister Sergey Lavrov at some point in the hopes of de-escalating tensions. Other highlights include flash UK and US PMI surveys for February, more central bank talk, and US Core PCE inflation figures for January.