LONDON (AFP) - The European single currency climbed against the dollar on Monday as a US plan to unload troubled assets from the books of struggling banks helped to rekindle investor risk appetite, analysts said. In early London trade, the euro rose to 1.3638 dollars from 1.3582 dollars late in New York on Friday. Against the Japanese currency, the dollar advanced to 96.43 yen from 95.95 yen on Friday. Traders were reacting to news that Washington plans a 500-billion-dollar programme to remove from bank balance sheets troubled assets that are clogging the financial system. "The announcement ... to remove toxic assets from banks' balance sheets will be the key influence on market direction this week," said Mitul Kotecha, head of global foreign exchange strategy at Calyon. "The bank plans will be crucial in determining whether markets will continue to maintain the recent improvement in sentiment and improved risk appetite established over recent weeks. "We suspect that the rally will not last and that risk aversion will pick up once again as the extent of the task ahead become clearer," added Kotecha. The euro meanwhile rose Monday as the European currency is seen as a riskier bet than the dollar and the yen and tends to rally if fears about the financial crisis recede. Westpac strategist Jonathan Cavenagh told Dow Jones Newswires that there was an "air of optimism" surrounding the toxic debt plan and markets were cautiously embracing it. More details were to be unveiled later in the day. Additional support came from the pledge by EU leaders to double loans available to eastern Europe to 50 billion euros (68 billion dollars). "Investors are buying the euro after the worries over eastern Europe abated," said Masatsugu Miyata, foreign exchange dealer at Hachijuni Bank. But analysts said the euro's strength might not last long because European leaders have not yet mapped out a clear strategy to resolve the region's economic problems. The dollar had fallen sharply last week as traders mulled the impact of a US move to pump more than a trillion dollars into the financial system and whether other nations would follow. In London trade on Monday, the euro was changing hands at 1.3638 dollars against 1.3582 dollars late on Friday, 131.52 yen (130.31), 0.9392 pounds (0.9380) and 1.5354 Swiss francs (1.5311). The dollar stood at 96.43 yen (95.95) and 1.1260 Swiss francs (1.1278). The pound was at 1.4519 dollars (1.4460). On the London Bullion Market, the price of gold fell to 952.40 dollars an ounce from 954 dollars an ounce late on Friday.