LONDON, Feb 12: The dollar fell against the euro on Tuesday after a positive German investor confidence survey and a revival in risk appetite led investors to seek potentially higher yields in riskier assets like equities.

In late European trade, the euro rose to $1.4603 from $1.4517 in New York late on Monday.

Against the Japanese currency, the dollar rose to 107.44 yen from 106.94.

The pound recovered a large chunk of its earlier losses, triggered when figures showed British consumer inflation crept up less than expected during January.

The annual rate of consumer price inflation rose 2.2 per cent on the year in January -- up from the 2.1 percent rate seen in December but below analyst expectations for a larger rise to 2.3 per cent.

The pound initially dropped sharply following the news, as many investors had been fearing the numbers would be even higher.

The euro continued to strengthen against the dollar, supported by a stronger-than-expected German economic sentiment survey, which indicated that the largest economy in the 15-nation single currency zone is bearing up better than expected.

The ZEW survey rose to minus 39.5 in February from minus 41.6, surprising analysts, who had expected a fourth consecutive decline in the headline figure.

“Overall the turbulent financial markets in January-February did not hurt investor sentiment in Germany,” said CIBC economist Jodie Tiller in London.

The ZEW survey of 314 financial analysts and institutional investors gives an indication of the sector’s current and medium-term expectations for economic activity and capital markets.

A negative result indicates that those polled expect growth to slow down.

In Europe late on Tuesday, the euro changed hands at $1.4603 against $1.4517 late Monday, at 156.71 yen (155.29), 0.7439 pounds (0.7440) and 1.6069 Swiss francs (1.6005).

The dollar stood at 107.44 yen (106.94) and 1.1016 Swiss francs (1.1022).

The pound was at 1.9612 dollars (1.9511).

On the London Bullion Market, the price of gold fell to $917 an ounce from $918 late on Monday.—AFP