Pound hits $1.62 - highest since 3 January

Growing fears that political squabbles in the US will result in a temporary government shutdown have seen the dollar weaken against the pound.

It's now hit $1.62 - a 3 January high. US bonds are more mixed - 10 years slightly weaker, but five year treasuries a tad stronger.

Economists are worried that a temporary shutdown will see economic growth dented. Goldman Sachs expects that even just a two day shutdown could see fourth quarter GDP 0.1 percentage points lower.

David Jones, chief market strategist, IG:

Not surprisingly, US markets opened sharply lower, around 1% below Friday’s close. As the session got under way, some of these earlier losses were being clawed back – again on the hope that the politicians will surely have to find some sort of agreement. September has been a very volatile month for the Dow, with a near 1000-point range, and while this political indecision remains we should prepare ourselves for potential further markets shocks.