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Fears that the two major car manufacturers may go bankrupt saw investors cutting their exposure to risk and seeking safety in the US and Japanese currencies, reports Reuters.
Meanwhile, the euro continued to fall from the two-month high it experienced last week after a regional savings bank was taken over by the Spanish government.
Sterling also fell by 1.2 per cent against the dollar.
Todd Elmer, a senior currency strategist at New York-based CitiFX commented: "The poor start to the week in global equity markets has acted as a speed bump for the broad rally in risk appetite we'd been seeing."
It has been reported that US president Barack Obama has insisted on strict restructuring deadlines before GM and Chrysler receive government aid.
