The pound to euro exchange rate is 0.3 pct higher on a day to day basis; GBP/EUR is at 1.2448 at 11:00 in London.

The pound sterling has largely under-performed the shared currency as of late, so these moves higher by sterling are welcome.

The euro is finally being weighed down by the dismal sentiment being seen on global stock markets - as Simon Denahm at Capital Spreads says: "Investors really are being truly pummelled from all angles at the moment with the fiscal cliff in the US, the eurozone debt crisis this side of the Atlantic and geopolitical tensions in the Middle East starting to heighten.  The last thing these fragile markets need right now is an escalation of the unrest in Israel and its surrounding countries as this has the potential to really get the bears baying for blood."

Jyske Markets have this morning pointed out that the outlook for the UK economy is likely to deteriorate going forward, and this scenario is likely to keep the pound within recent ranges against the euro:

"The UK retail sales turned out lower than expected (yesterday), but came fully in line with the process/period we expect the British economy to enter over the coming months and quarters."

Richard Driver at Caxton FX shares this sentiment: "As if to support King’s rather gloomy assessment of the UK’s near-term growth outlook this week, the monthly figure from the UK retail sector disappointingly contracted by a pretty huge 0.8%. Sterling suffered as you would expect, as much of the positivity towards the UK economy’s Q3 upturn has receded."

However, Driver points out that the Eurozone is also struggling, he thus backs sterling:

"We could see some further gains ahead: "Data confirmed that the eurozone has officially entered recession with a second consecutive quarter of contraction, though this was only by 0.1% (less than expected). IMF boss Lagarde has asserted that a Greek deal should emerge next week. This pair has bounced up to €1.2450 and a further recovery looks likely."