The dollar finished mixed in light domestic trading as currency traders kept a close watch on the economic summit in Houston but had little news to act upon.
Currency dealers said trading in the British pound was the most active feature of the foreign exchange markets Monday.
Sterling was boosted by continued expectation that Great Britain soon will join Europe's exchange rate mechanism. The mechanism limits exchange rate movements, and the markets expect it would strengthen the currency.
The pound also was supported by comments from British Chancellor of the Exchequer John Major that the recent strength of the pound was no fluke but reflected the currency's true value. Major spoke at the Houston meeting of finance ministers from the seven leading industrial nations.
"Sterling remains extremely strong across the board," said Robert Hatcher, a corporate currency dealer for Barclays Bank PLC in New York.
In London, a pound was quoted at $1.8055, up strongly from late Friday's $1.7865. The pound had not been above $1.8000 in London since Jan. 4, 1989. Later, in New York trading, a pound cost $1.8080, more expensive than $1.7865 late Friday.
The Japanese yen was boosted in domestic trading by comments from a U.S. Treasury official that the currency was considered low in value compared with other currencies, said Lorenzo Troni, vice president of foreign exchange at Paine Webber International Inc. in New York.
In Tokyo, the dollar closed at 150.70 yen, down 0.25 yen from Friday's close. Later in London, the dollar was quoted at 151.10 yen. In New York, a dollar bought 151.15 yen, down from 151.70 yen late Friday.
Gold prices fell. On New York's Commodity Exchange, gold bullion for current delivery slipped $2.90 from late Friday to settle at $358.20 an ounce. Republic National Bank in New York quoted a late bid for gold at $357.40, off $2.80.