The Euro fell back below parity with the Dollar as it plummeted to a 20-year low. Sterling also slipped to its worst level in two years.
The development has left traders panicking following a further surge in gas prices on Monday.
The news also comes amid concerns both Brexit Britain and the Eurozone could face a bleak winter.
Russia exacerbated supply concerns after it announced a three-day closure of the Nordstream 1 gas pipeline for unscheduled maintenance.
The Euro slumped by 1.1 percent against the US Dollar in afternoon trade to hit its lowest level since 2002 at $0.9928.
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However, Sterling also dropped to a level not seen since the start of the COVID-19 pandemic, when it fell by 0.7 percent to take it to $1.1742.
According to the Telegraph, stock markets sold off on mounting recession fears, with Eurozone blue-chip shares plunging almost 2 percent and the FTSE 100 dropping 0.2 percent.
NASDAQ in America also fell by 2.5 percent and the broader S&P 500 dropped 2.1 percent.
Fears about a recession have soared as gas prices reached another high.
Jordan Rochester, currency analyst at Nomura, warned the Euro could come under more pressure and risks falling lower over winter as markets are “not pricing this recession risk properly”.
He said: “There has been a significant clean out of euro shorts since parity was reached, governments are starting to share higher energy costs with consumers, and firms will have to start slowly curtailing production, while supply lines are being hit by a lack of transport options on the lower water levels on the river Rhine.”