LONDON (Reuters) - U.S. investment bank Morgan Stanley raised its currency forecasts for the euro on Friday, predicting it would hit $1.25 early next year and be one-for-one versus Britain's pound for the first time in its 18-year history.


Morgan Stanley also cut its forecast for the Mexican peso to 20 per dollar in the third quarter of next year, saying it would come under pressure ahead of the country's elections.


(Reporting by Marc Jones and Patrick Graham)