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Dollar Heads for Biggest Weekly Gain in Three Years Before G-8 Kim-Mai Cutler and Kosuke Goto June 13 (Bloomberg) -- The dollar headed for its biggest weekly gain in three years against the euro on speculation officials from the Group of Eight nations will signal they favor a stronger U.S. currency. The currency was also poised for the biggest weekly advance since 2004 versus the yen before a government report that will probably show U.S. inflation accelerated, giving the Federal Reserve more reason to raise interest rates. The dollar's gains are ``very satisfying,'' French Finance Minister Christine Lagarde told reporters in Osaka, Japan, before meeting her counterparts today and tomorrow. Treasury Secretary Henry Paulson this week signaled the U.S. may buy its own currency. ``The U.S. is serious about putting a floor under the dollar,'' said Michael Klawitter, a currency strategist in Frankfurt at Dresdner Kleinwort, the investment bank owned by Allianz SE, Europe's biggest insurer. ``Fed officials are saying they are well aware of the link between dollar weakness and higher inflation and this by itself means the Fed will do what it can to prevent the dollar from moving lower.''
(Article continues below) The dollar traded at $1.5338 per euro at 10:56 a.m. in London, from $1.5439 in New York yesterday. The dollar rose 2.8 percent this week, the most since the five days ending June 5, 2005. The currency traded at 108.19 yen, from 107.96 yesterday. It has risen 3.1 percent this week, the biggest advance since February 2004. The euro fell to 165.91 yen, from 166.68. The U.S. currency may rise to $1.45 a euro by the end of the year, according to Klawitter. The dollar rose to 108.29 yen today, the highest since Feb. 25.
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