ECB can’t rely on Fed to do its work

With the composite euro-zone PMI pointing to steady growth and hawkish comments from Fed Chair Janet Yellen pushing the euro down to a four-month low against the dollar, further policy loosening by the ECB might not appear necessary.

But the Fed may not hike in December and, even if it does, the euro may not fall by much. Meanwhile, the effects of its previous depreciation are starting to fade and the euro-zone’s QE programme remains modest by international standards. In short, the ECB can’t rely on the Fed to do its work for it.