To start with: being a traveling merchant in the Middle Ages was inherently dangerous. On one hand, there were the natural problems of weather, disease, drowning at sea. On the other, humans made it worse. Piracy was a lurking concern--merchandise could be stolen, merchants enslaved. Within Latin Europe, at least, overland trade could be treacherous as well. Travelers who left the protection of their home territory technically had no legal protection from kidnapping and abuse. Hence the repeated issuing of privilegia or private laws (laws that applied to a limited group of people) attempting to protect merchants and other travelers from seizure and harrassment.
But certain people--and increasing numbers of them, as Europe's economy continued its upward climb drawing on the strength of the Islamic Mediterranean--founds that profit outweighed risk.
On to the actual question: Muslim merchants in Latin Europe. Where would they be, and what did Muslim-Christian relations look like in those areas during this time period?
One phenomenon of the Middle Ages is that Christian and Jewish merchants travel to Islamic territory much more frequently than Muslim merchants land in Christian ports or haul themselves overland to Christian cities. To some extent, this arises out of an 8th-9th century development in Islamic theology, formulated as the Byzantine Empire started to get its act together and reconquer a bit of territory/prevent further Islamic expansion. Muslims saw the earth as divided into the "world of submission to God" and the "world of war", and preferred to focus their efforts on shoring up the dar al-Islam.
Olivia Remie Constable argues in Trade and Travelers in Muslim Spain that the trend of Christian/Jewish merchants traveling to Islamic lands and not vice versa only increased as Europe's economy picked up after 1000. She observes that while the southern coastline of al-Andalus served as an international market exchange, its overland trade was almost exclusively with Christian Iberia to its north (...which is understandable, since the other option was to cross the Pyrenees), and nearly all of that seems to have been in the hands of Jewish and Christian merchants.
But if Muslim merchants are not plowing the transalpine passes or crossing the English Channel, by 1100 there would absolutely have been Muslim merchants in Latin Europe by virtue of the developing geopolitical situation in Iberia and Sicily.
Scholars continue to debate the specifics of the theological and ideological relationship between the early Reconquista and the First Crusade. Regardless of what owed what to what, by the time Pope Urban preached at Clermont, the Umayyad consolidation of al-Andalus had splintered into a multitude of warring kingdoms called ta'ifas, and the Christian principalities in the north were pressing their sudden advantage with territorial expansion. Christian kingdom allied with Muslim against Christian and Muslim across a frequently-empty frontier.
War and alliance brought the dangers of operating in a war zone or with legal protection from a kingdom that might not be able to enforce its protection--but also more opportunities for trade and contact. The thing to keep in mind here is that prior to the so-called fitna period of the ta'ifa kingdoms, Islamic and Christian Iberia had existed as "mutually productive enemies," one might say. There is rhetorical antagonism from religiously-minded authors. But merchants and those who benefited from merchant activity were used to the day-to-day experience trumping whatever theological considerations might have vexed the local bishop. (Who was, more likely than not, an even bigger beneficiary of the luxuries and gold going north.)
The "productive antagonism" needed to continue with Christian advances. Not only were kingdoms allied across religious lines (not to mention hiring mercenary soldiers at will), but Muslims and Jews from Mediterranean-climate al-Andalus had the knowledge of how to farm in that climate much more so than the Christians from the more North Atlantic-esque north. Although it was never pleasant to be the civilian population of a besieged and conquered town in the Middle Ages, we do not see massive pogroms or riots against already-subdued Muslim populations in Christian territory in this era.
That does of course leave room for individual outbursts of violence, a Christian attacking a Muslim merchant because he was a Muslim. I'm not aware of any records of this, however, and the rest of the evidence suggests this would have been an aberration rather than the rule.
I suggest that there is ample enough evidence of medieval armies' "scorched earth" tendencies of plunder--massacring, looting, enslaving anyone in their path without much regard for religion (see: Jerusalem 1099; see also: the leaders of the First Crusade desperately begging their troops not to ravage the lands of Byzantine farmers and, oh yeah, slaughter the inhabitants of Byzantine cities). This would suggest increased danger for any merchants who happened to run into an army. On the other hand, the needs of mobilizing for war in conjunction with (a) the rising Christian economy (b) the increased gold trade from the West African empires, made being a merchant in 11th-12th century Iberia an increasingly lucrative proposition.
[cont'd]
Related question(s), if permitted:
How were Muslim treated by the average Catholic populace around them during this time? Was immigration common for Muslims/Moors? Does Moor describe what I think it does in this instance? Was there a difference between, say a Muslim in Spain vs a Muslim in France/Italy?
This is really a side note to the already excellent answer by /u/sunagainstgold, but the recently published archaeological results from Nimes in Southern France, although dating to a slightly earlier period, would suggest that there were also small Muslim communities probably ringed around the northern shore of the Med. Although the excavators suggest that these particular graves are those of soldiers, it seems (to me at least) that they could just as easily be merchants or some sort of commercial middlemen, especially the lack of exclusion from the community of Christian burials.
Source: Here.