British pound in sudden plunge against US dollar, US leaders seen making progress on debt ceiling

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The British pound has enjoyed a strong recovery over the course of today with inflation data proving to be the necessary catalyst.

However, "the dollar suddenly gained ground in mid morning European trade today as both EUR/USD and GBP/USD plunged more than 50 points in a matter of minutes despite relatively buoyant eco data from both regions. The move higher in the buck was likely caused by growing speculation that US legislators were getting close to a compromise on the US budget and debt ceiling deal with GOP expected to caucus at 1500 GMT today." - Boris Schlossberg at BK Asset Management

US Senate leaders have expressed optimism on raising the federal debt ceiling to avert a potentially disastrous default.

They were also nearing a deal to end a partial government shutdown, now in its third week, congressional sources said.

A budget bill would also need to pass the House of Representatives. House Republicans triggered the whole political deadlock two weeks ago.

The US must raise its $16.7tn (£10.5tn) borrowing limit by Thursday.