The euro fell to as low as $1.18605, its weakest level since March 2006, having fallen below an important support at $1.20. The common currency last traded at $1.1955, down 0.4 per cent from late U.S. trade on Friday.
In an interview with German financial daily Handelsblatt, ECB President Mario Draghi said the risk of the central bank not fulfilling its mandate of preserving price stability was higher now than half a year ago.
"The market took his comments to mean that he is ready to adopt quantitative easing," said Shin Kadota, chief forex strategist at Barclays in Tokyo.
Economists forecast that Wednesday's euro zone inflation data will show prices fell 0.1 per cent in December for the first time since 2009.
That should fan expectations the ECB could ease its policy as soon as Jan. 22, when it will hold its first policy meeting this year.
Also underscoring the pressure on central banks to implement more stimulus, business surveys last week showed factories struggled to maintain growth across Europe and Asia.
Even in the United States, which is seen as one bright spot in the global economy, the pace of manufacturing growth slowed more than expected in December.
That sapped investor appetite for stocks, with Wall Street shares ending mostly flat on the first day of trade in 2015 on Friday, after stellar gains of 11.4 percent in the S&P500 index last year.
S&P futures dipped 0.1 per cent in early Asian trade on Monday while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7 percent.
Japan's Nikkei fell 0.6 per cent on the first trading day of the year.
Chinese shares, however, maintained their bullish tone since last year on hopes of more stimulus, with the CSI300 index adding 1.0 per cent on the first trading day of 2015 after rallying 52 per cent last year.
Oil prices, whose decline of more than 50 percent from peaks in June last year rattled many energy producers, flirted with 5-1/2-year lows as global growth concerns fanned fears of a supply glut.
Brent crude futures traded at $55.86 per barrel in early Monday trade, just above Friday's low of $55.48.
That did not help commodity currencies such as the Canadian dollar, which fell to C$1.1840 to the U.S. currency, its lowest level since mid-2009.
The Australian dollar likewise dropped to a 5-1/2-year low of $0.8053.
The US dollar also surged against the Swiss franc and sterling, extending a recent bull run as markets wagered a relatively healthy US economy will lead the Federal Reserve to raise rates in the middle of this year.
The dollar was quoted as high as 1.02955 francs, from 1.0012 francs late in New York on Friday. Sterling sank as low as $1.5185, levels last seen in mid-2013.
Copyright: Thomson Reuters 2015