The dollar climbed as the US government reopened following a five-hour shutdown after the House of Representatives approved a budget which will keep it running until the end of next month.
The dollar edged 0.14 per cent higher against the pound, to £0.7198, and rose off lows of €0.8140 to €0.8158 - although it was still trading 0.1 per cent lower against the euro.
The shutdown of non-essential federal functions started at midnight last night, after the budget bill failed to pass thanks to Republican senator Rand Paul, who delayed the vote by engaging in a nine-hour debate in protest at his party's plan to increase the budget deficit by delaying the vote.
In the end, the bill was approved by 240 votes to 186 after a poll during the wee hours, ending the second US government shutdown this year.
At the end of last month the US government was forced to shut down after Democrats and Republicans failed to agree on a new budget. However, three days later the two sides reached an agreement on the immigration bill, a particular sticking point for the Democrats.
Craig Erlam, senior market analyst at Oanda, suggested markets were unworried by the brief shutdown.
"Markets haven’t been too concerned about the prospect of a shutdown since the start of the year despite two having now taken place so I don’t expect to see any boost now that a deal has been reached," he said.
"This is merely just another self-inflicted risk that’s been temporarily averted."
However, David Madden, market analyst at CMC markets, added that such events were "unlikely to be good for the currency".