The euro fell as low as $1.2067, its weakest since June 2010 and creeping ever closer to the 2010 low of $1.1875, according to Thomson Reuters data.
Against the yen, the euro dropped to 94.22 yen, a level not seen since late 2000.
On Friday, Spain's Valencia region requested the government for financial help from a new rescue fund. It led Madrid's borrowing costs to shoot up to levels regarded as unsustainable in the long run.
Murcia became the second Spanish region to request help from the central government, and according to media reports six regions will now seek help after the announcement by the heavily indebted Valencia.
Analysts said the developments in Spain had raised fears that the eurozone debt crisis was worsening and spreading to the region's biggest economies.
"The fear now is that given its debt woes, Spain may eventually need a bailout from the International Monetary Fund or the eurozone's rescue fund," Justin Harper of IG Markets told the BBC.
"That is driving investors away from the euro to other relatively safer-haven assets."
Analysts said that investors were concerned that the crisis may spread even more.
"Just as the eurozone's problems had appeared to calm down, uncertainty rears its head again," said Masayuki Otani, chief market analyst at Securities Japan, BBC reported.
"The week is off to a challenging start as rising fears over Europe push risk aversion higher," Camilla Sutton, chief currency strategist at Scotia bank in Toronto, was quoted as saying by Reuters.
"Most of the focus is on Spain, with rising concern it too will need to access financial aid," Sutton said.
Source:
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