The Canadian dollar weakened against its major peers in the European session on Monday, on concerns that an aggressive monetary tightening across the globe could trigger a recession.

Investors continue to worry about the likelihood of more rate hikes from the Federal Reserve at its upcoming meetings to control inflation.

In its interim economic outlook, the Organisation for Economic Co-operation and Development said that the global economy has lost momentum in the wake of Russia's war of aggression in Ukraine, which is dragging down growth and putting additional upward pressure on inflation worldwide.

The OECD retained global growth forecast of 3 percent for this year. but downgraded its outlook for 2023 to 2.2 percent from 2.8 percent.

Elsewhere, U.S. Secretary of State Antony Blinken said that the consequences of Russia using nuclear weapons in Ukraine would be horrific.

The loonie fell to 0.8898 against the aussie and 105.24 against the yen, from its early near 3-week high of 0.8827 and a 2-day high of 106.05, respectively. The loonie may locate support around 0.90 against the aussie and 98.5 against the yen.

The loonie touched 1.3709 against the greenback, its lowest level since June 2020. If the loonie falls further, it may test support around the 1.38 region.

The loonie eased to 1.3218 against the euro, from near a 3-week high of 1.3000 seen in the Asian session. Further decline in the currency may find support near the 1.35 mark.

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