Analysts said the British pound started to drop after Britain and the European Union (EU) said over the weekend that there was a long way to go before they could agree a Brexit deal.
Britain is scheduled to leave the EU on Oct. 31, and an EU summit to start on Thursday is seen as the last chance for the two sides to agree any deal before that deadline.
The dollar index, which measures the greenback against six major peers, rose 0.14 percent at 98.4490 in late trading.
In late New York trading, the euro decreased to 1.1031 dollars from 1.1041 dollars in the previous session, and the British pound fell to 1.2576 dollars from 1.2659 dollars in the previous session. The Australian dollar fell to 0.6774 dollar from 0.6799 dollar.
The dollar bought 108.35 Japanese yen, lower than 108.50 Japanese yen of the previous session. The dollar fell to 0.9969 Swiss franc from 0.9974 Swiss franc, and it rose to 1.3230 Canadian dollars from 1.3187 Canadian dollars.