The pound to euro is 0.22 pct lower than at Thursday night's closing level; GBP/EUR is at 1.2381 at 10:00 in London.

The pound to dollar by contrast is 0.1 pct higher; GBP/USD is at 1.6061.

Spanish bailout rumours have given the euro an inevitable lift this morning.

The Spanish bailout issue has been weighing on the euro for weeks now and the markets have opened enthusiastically amid rumours that PM Rajoy is ready to cave into the pressure.

Luis de Guindos, Spain’s economy minister has triggered the move this morning by asserting that there is no political resistance from within the eurozone to a Spanish bailout request.

"Only time will tell as to when Rajoy will bite the bullet but this morning’s rumours look set to keep the euro well-supported today, so sterling is likely to remain under €1.24," notes Richard Driver at Caxton FX.

With regards to the pound dollar exchange rate, sterling benefitted from a lift thanks to a stronger EUR/USD pairing, but gains were not too impressive.

Thursday saw the release of the most impressive weekly US unemployment claims figure in almost four years, which really does indicate that labour market improvements could be sustained across the Atlantic.

Trade balance data from the US was less glowing though, pointing to a weakness in US exports.

"With stocks rebounding yesterday and the euro enjoying a significant bounce, there was much weaker demand for the dollar, which enabled sterling to pop up above the $1.60 level. The bounce was not aggressive enough to make us revise our expectations for a weaker GBP/USD pair though.  We could see further short-term gains today though," says Driver.