The euro in 2015: A very bad start

ECB will take action before Greek election: Nordea

The euro can't seem to catch a break, starting 2015 with a drop to a nine-year low against the U.S. dollar as the timetable for central bank action appears to step up amid a storm of other negatives for the common currency.

"The market was divided over when the ECB (European Central Bank) would undertake QE (quantitative easing)," David Forrester, a foreign-exchange strategist at Macquarie, said.

But comments from ECB President Mario Draghi changed that, he said, adding expectations are now for a policy adjustment possibly at the year's first meeting on Jan. 22.

Draghi's words

In an interview with German newspaper Handelsblatt, Draghi said he believes the risk that the central bank won't be able to fulfill its mandate to preserve price stability had risen compared with six months ago.

Read More Draghi: Risk of ECB failing its mandate higher than 6 months ago

"It moves the timetable for QE potentially forward," he said, but he noted that other factors are also weighing. "You also have U.S. dollar strength and the Fed potentially raising ratesthat's what's feeding the euro weakness now."

Weakness abounds, with the euro fetching $1.1936, after trading as low as $1.1860, its lowest since 2006.

The ECB likely wants the euro to decline to help spur the economy and inflation, noted Jesper Bargmann, head of trading for Asia at Nordea. But he added, "I'm not sure they would like the euro to collapse in the short term."

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Just how low could the euro fall? Willem Nabarro, head of European equities at Exane BNP Paribas, believes $1.1760 is the first targetthe level where the common currency was first introduced, although he noted that consensus forecasts range from $1.10 to $1.15.

Other factors

There are other ingredients likely spoiling the euro stew.

For one, the euro's attractiveness as a reserve currency appears to be slipping, with the IMF saying that the share of global central banks' currency reserves held in the common currency was at 22.6 percent in the third quarter of last year, the lowest in a decade and off by more than a full percentage point from the previous quarter.

Read More What? This country just joined the euro zone

Another headwind: the price of oil has also started off the year with a run downward to fresh more than five year lows. U.S. crude futures extended declines to a third day on Monday, trading as low as $51.40 a barrel, while for February delivery fell as low as $55.36 a barrel, levels last seen in 2009.

"In trying to anticipate the possible extent of further euro depreciation, it is worth remembering that inflation and inflation expectations lie at the crux of ECB policy initiatives," Brian Martin, an economist at ANZ, said in a note Friday. "The trend in EUR/USD has been closely correlated with the trend in the oil price and is likely to remain so for the foreseeable future."

ECB will take action soon: Pro

Greece—which triggered the euro zone debt crisisis also rearing its head again. The country announced snap general elections for January, with Syriza, the far-left opposition party, likely in the lead. It has vowed to overthrow the onerous terms of Greece's international bailout, potentially destabilizing the country's relationship with the rest of Europe.

"The polls are a reminder that various parts of Europe are only a vote away from market unfriendly policymakers, so are another reason to stay short euros," JPMorgan said in a note Friday.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

—CNBC's Katy Barnato contributed to this article