The dollar hovers around its seven-week high trading at $1.3070 on the statement from the US Treasury Secretary John Snow who said the Bush administration wants “to do things to sustain the strength” of the dollar. The determination the US leadership showed in bringing down the budget deficit that hit a record $412 billion last year was supportive of the dollar.

``In the past he would say `strong dollar’ and then talk about market forces; now he’s talking strong dollar and saying how the administration will accomplish it with policy,’’ said Deutsche Asset’s Faller. ``That seems to be a change, but we need to hear more rhetoric along those lines.’’

The US current deficit reached a record $164.7 billion in the third quarter but shrank in November to $54 billion from $55.5 billion in October.

Good US employment data also fueled the dollar increase after the December job growth report showed an addition of 157,000 employees to payrolls, good results though missing analysts’ expectations of 175,000 new jobs.

The job creation report supported the confidence that the Fed will continue with its quarter-point increases at its next meeting in early February, lending further strength to the dollar.

``They’re going to continue to be raising rates probably at a measured pace,’’ said Nicholas Pifer, head of global fixed income in Minneapolis at American Express Asset Management Group. ``The more the Fed raises rates the more expensive’’ it becomes betting against the dollar, he said.

European Central Bank President Jean- Claude Trichet and his counterparts in the Group of 10 will likely keep the dollar weakness the focus of their discussions.