Heading into 2015, ASB Bank said the eurozone was a major risk factor once more through the loss of growth momentum and rising risks of broad deflation after inflation turned negative across the region.
On Friday, the soaring kiwi/euro rate forced a small foreign exchange brokerage to close its doors because of its losses through its clients' heavy Swiss franc exposures.
ASB Bank chief economist Nick Tuffley says the market expects a broad set of measures from the ECB, including what will be a controversial move into buying sovereign bonds.
Bond buys in the order of 500 billion to 750 billion are expected.
Tuffley said if the figure came in at the lower end, it could be underwhelming for those expecting a bold ECB initiative. A bond-buying programme at the high end could also put more downward pressure on the beleaguered euro.
"From an economic stimulus point of view, Europe is finding itself increasingly challenged," he said.
"Growth has been drying up. Market participants expect the ECB's moves to create more interest in the currencies that still offer reasonable yield, such as the New Zealand and Australian dollars."
The worry for those expecting the ECB to act boldly would be its tendency to "underwhelm" when big decisions needed to be made, he said.
Westpac senior markets strategist Imre Speizer said a programme in excess of 500 billion would probably be enough for NZ/euro rate to resume its 16-month rise to beyond 68c. "The main influence on the New Zealand dollar this week will probably come from the ECB meeting ... Market expectations for QE are high, so a volatile session is in store."
To cap off eurozone risks, Greece is holding a general election on January 25, with the anti-austerity Syriza party ahead in the polls.
Softer euro hits visitor spending power
The drop in the euro against the kiwi will cut spending power of European tourists, including the important German market which grew by 13 per cent to 77,000 in the past year.
Germans on average stay for a long time - on average six weeks - and spend $5200 each while they are here.
France is also an important tourism market with more than 30,000 visitors as is the Netherlands with 22,000 tourists, many of whom travel with their families and are also big spenders.
Tourism Holdings' rental vans are popular with independent travellers from Europe and its chief executive Grant Webster said it was a case of keeping a "watching brief" on the impact of the lower euro.
"There are no issues to date," Webster said.
Almost 18,000 Swiss tourists come here and their franc will go further here, and in other countries.
Webster said European tourism wholesalers hedged on currency for long periods to remove the impact of volatility.
The weak euro will make holidays more affordable in Europe.
House of Travel commercial director Brent Thomas said it would be a "significant" boost for Kiwis arranging holidays. "This is the high season for booking Europe," Thomas said. "It's going to be a real boon."
- additional reporting Grant Bradley
