LONDON, Oct 14: The euro climbed further against the dollar and the yen on Tuesday, buoyed by world governments’ major moves to rescue the global banking sector, dealers said.

In late London trading, the euro climbed to $1.3662 from $1.3576 dollars in New York late on Monday.

Against the Japanese currency, the dollar firmed to 102.31 yen from 102.01 yen on Tuesday.

Sterling jumped against the US unit after news that British 12-month inflation surged to a 16-year high of 5.2 per cent in September due to soaring energy bills. However, analysts expect inflation to plunge in the coming months as oil prices cool further.

Currency markets also appeared to brush off gloomy economic forecasts from Germany, which surveys said was headed for recession, and a dip in industrial production in the eurozone.

“The fear of a systemic collapse has decreased. Therefore risk appetite of global investors is increasing gradually,” said Commerzbank analysts in a statement.

In recent weeks, the dollar had strengthened as investors sought shelter, in what is seen as a relatively “safe” currency, from collapsing stock markets and economic meltdown. The yen meanwhile had found support on the view that Japan would remain relatively untouched by the credit crunch.

But “the yen has been undermined by the plethora of government initiatives announced over the past couple of days to restore confidence to the global financial system,” said Lee Hardman, Bank of Tokyo-Mitsubishi.—AFP