A system and method are provided for tracking a functional part of an instrument during an interventional procedure and displaying dynamic imaging corresponding to a functional part of the instrument. The system comprises: at least one instrument; a system for acquiring anatomical images relevant to guiding the instrument; a tether connected to the imaging system at a fixed end and connected to the instrument at a distal end, the tether comprising at least one longitudinal optical fiber with a plurality of optical shape sensors; an optical console that interrogates the sensors and detects reflected light; and a processor that calculates local curvature at each sensor location to determine the three-dimensional shape of the tether and determines the location and orientation of the instrument relative to the images using the local curvatures of the tether and the location of the fixed end of the tether.