Financial markets have braced for a shutdown in recent days as Congress bickered over a bill to fund the government and the dollar slipped on Tuesday after the deadline to reach an agreement passed.
U.S. stock futures were little changed in Asia trade, while European stock markets opened mixed and Asian shares were mostly higher.
"I think a deal will have to be done, but as we saw with the fiscal cliff debate last year, [U.S. lawmakers] will push this out as much as they can," Mike Ingram, market analyst at BGC Brokers in London, told CNBC. "That means markets will remain volatile and choppy."
Government shutdown fears sent the S&P 500, a broad measure of U.S. stocks, to a three-week low on Monday, while the U.S. dollar on Tuesday hovered near the previous day's one-month low against the yen and 7-1/2 month trough against a basket of other major currencies.
Uncertainty in the U.S., together with political turmoil in Italy, means risk aversion is the flavor of the day for global markets. 101071822
Analysts said the stalemate in the U.S. Congress over the budget did not bode well for the more important discussions that are due to take place later this month on the debt ceiling.
They added the wrangling was damaging for business sentiment and if there is no budget deal soon, the Federal Reserve could be tempted to leave its $85 billion-a-month asset purchase program in place for longer than anticipated to support the economy.
(Read more: Congress could kill stock rally if government shutdown drags on)