The euro took a fresh spill on Monday after Russia shut a major gas pipeline to Europe, leading some governments there to announce emergency measures to ease the pain of soaring energy prices.

The euro lost 0.5 percent to reach a two-decade low of $0.9900 as markets priced in more risk of a European recession.

The European currency has continued to weaken against the dollar since the start of the year, hammered by economic turbulence and uncertainties sparked by the conflict in Ukraine.

Russian gas giant Gazprom said Friday the Nord Stream 1 pipeline due to reopen at the weekend would remain shut indefinitely.

Germany announced plans to spend 65 billion euros ($64.7 billion) on shielding customers and businesses from rising costs, while Finland and Sweden offered liquidity guarantees to keep power companies open.

"We now expect the EUR/USD and GBP/USD rates to reach $0.90 and $1.05 respectively next year as the economic slowdown and the terms of trade shock hitting the region take their toll," said Jonas Goltermann, a senior economist at Capital Economics.

"Ultimately, Germany would need to cut natural gas consumption by 15 percent to keep gas storage facilities from running empty," said analysts at ANZ. "Gas rationing looks very likely, as even at 95 percent full, storage would only last 2.5 months."

Read more: Euro near dollar parity: Causes, impact and what's next

(Source: Reuters, AFP with edits)