NEW YORK, Oct 13: The euro surged on Monday after a unified European government plan to rescue banks from collapse helped the currency sprint away from a 1-1/2-year low against the dollar.

Sterling also rose against the dollar after the British government said it would pump $64 billion into three of its biggest banks, part of a plan to restore confidence in what has become the worst global financial crisis since the 1930s.

The euro was up 1.8 per cent in early New York trade at $1.3648, near a session peak of $1.3671. On Friday, it sank to $1.3257, its lowest level since March 2007.Against the yen, the euro climbed 1.4 per cent to 136.79.

The dollar fell 0.4 per cent to 100.25 yen.

The low-yield yen surged last week as anxious investors unwound trades financed with the Japanese currency, but renewed risk appetite made it one of the poorest performers on Monday.

Sterling rose 1.9 per cent to $1.7360 after slumping to a five-year low near $1.68 on Friday.—Reuters