Danske Research discusses EUR/GBP outlook and targets.

"EUR/GBP has been caught between two opposing forces with the poor risk sentiment putting upward pressure on the cross, amplified by an increasingly challenging political landscape in the UK with focus on leadership challenges within the Labour Party. On the other hand, while the UK is still a net-energy importer akin to the euro area, the energy mix in the UK slightly favours a relatively stronger GBP vs EUR. If ceasefire talks prove effective, we expect the focus to return to fundamentals," Danske notes.

"We highlight that the UK economy remains fragile and see scope for a larger reversal of Bank of England repricing than for the ECB, opening for a move higher in EUR/GBP. We forecast EUR/GBP to rise towards 0.89 on a 6–12-month horizon," Danske adds.