FXStreet (Edinburgh) - Morten Helt, Senior Analyst at Danske Bank, now expects the European cross to grind lower towards the 0.68 handle in a 3-month view. Key Quotes “We have lowered our 1M and 3M EUR/GBP forecasts to 0.69 (from 0.74) and 0.68 (from 0.72), respectively, as we expect the ECB to ease substantially in December”. “Paradoxically, the Fed is expected to, and largely priced for, lift off in December, while the first BoE rate is expected to arrive almost one year later (November 2016) despite the (i) the UK economy being expected to continue to grow at or above trend in 2016 and (ii) the UK unemployment rate having already fallen below the NAIRU estimate”. “In our view, the very dovish pricing of the UK money market curve suggests that EUR/GBP risks are skewed on the downside in coming months”. “Longer term, we expect the cross to stabilise and eventually move gradually higher as we expect fiscal consolidation and political risks in the UK (EU referendum) to weigh on the GBP, while the euro, to a greater extent, should benefit from fundamentals next year”. For more information, read our latest forex news.