0857 GMT - Sterling could extend recent gains against the euro as the single currency continues to face significant domestic headwinds, ING's Francesco Pesole says in a note. While market expectations for the Bank of England to raise interest rates appear excessive, translating that into a weaker sterling versus the euro remains challenging, he says. French debt concerns are weighing on the euro while elevated oil prices support expectations for U.K. interest rate rises, he says. The euro rises 0.1% to 0.8490 pounds after reaching an 11-week low of 0.8456 Monday, according to LSEG. ING expects it to fall as low as 0.8400.