The European single currency climbed against the dollar Thursday amid hopes that heavy interest rates cuts around the world would help stem a global financial crisis, dealers said.

In late morning London trading, the euro climbed to 1.3758 dollars from 1.3663 dollars in New York late on Wednesday.

The dollar rose to 101.34 yen from 99.42 yen on Wednesday, when it sank under the 100-yen barrier for the first time in seven months.

Hong Kong, South Korea and Taiwan all reduced borrowing costs Thursday, a day after central banks in the United States, Canada, Europe and China slashed their key interest rates in a bid to tackle an escalating economic crisis.

"The unprecedented coordination of rate cuts by the major central banks yesterday (Wednesday) is likely to provide at least a short-term alleviation of the extremely negative sentiment towards financial markets," said Barclays Capital analyst David Woo.

"Even though markets had been increasingly expecting such a move and equity prices ended lower yesterday, things would have probably been a lot worse in the absence of the coordinated easing."

Woo added: "The fact that interest rate cuts do not directly address the underlying problems in financial markets means that further measures are required to achieve even a semblance of stability."

The yen meanwhile fell back from recent highs against the dollar and euro Thursday as ailing stock markets showed signs of stabilising, dealers said.

"People have apparently taken (the coordinated monetary easing) positively, and the sense of risk aversion eased," Satoshi Okagawa, head of the forex spot trading group at Sumitomo Mitsui Banking Corp, told Dow Jones Newswires.