Euro Drops Amid Energy Crisis

The euro fell against its major counterparts in the European session on Monday amid risk aversion, as natural gas prices surged and indications of aggressive monetary policy tightening by major central banks sparked recession concerns.

Russia's state-owned energy company Gazprom announced on Friday that gas supplies through the Nord Stream 1 pipeline will be stopped for three days for maintenance.

The disruption of natural gas supplies to the European Union triggered a further surge in prices in the region.

Over the weekend, Bundesbank President Joachim Nagel said that the German economy is "likely" to fall into a recession during the winter, if the energy crisis worsens further.

Investors worry that inflation and further policy tightening could fuel a recession.

The euro declined to near a 6-week low of 0.9989 against the greenback and a 4-day low of 136.60 against the yen, down from its early highs of 1.0047 and 137.94, respectively. The euro is seen finding support around 0.97 against the greenback and 134.00 against the yen.

The euro touched a record low of 0.9575 against the franc. The pair had closed Friday's deals at 0.9625.

Retreating from its prior highs of 1.3050 against the loonie and 1.4609 against the aussie, the euro dipped to near a 4-week low of 1.2981 and a 6-day low of 1.4456, respectively. The currency is likely to face support around 1.27 against the loonie and 1.41 against the aussie.

The euro fell to 0.8461 against the pound, off an early high of 0.8494. Against the kiwi, it was down at 1.6116. The next possible support for the euro is seen around 0.82 against the pound and 1.59 against the kiwi.