FOREX-Dollar bolstered by rate outlook, G8 eyed

* Dlr index on course for best week in 3 yrs ahead of G8

* Euro pressured as officials temper rate hike expectations

* All eyes on G8 ministers for clues on FX policy

(Changes dateline, byline, adds quotes, updates prices)

By Simon Falushi

LONDON, June 13 (Reuters) - The dollar rose against the euro and the yen on Friday, and was on track for its best week in over three years against a basket of currencies as investors focused on a weekend meeting of G8 finance ministers.

The U.S. currency benefitted this week as the government and Federal Reserve took aim at inflation and its impact on the dollar, raising the prospect of dollar-buying intervention. A further boost came on Thursday as U.S. retail sales data surprised on the upside. Click on [ID:nN11255522].

The U.S. currency could derive further support if U.S. Treasury Secretary Henry Paulson and other finance ministers attending a Group of Eight finance ministers meeting in Japan issue dollar-supportive comments.

"If the tone of (the G8) statement is unchanged from the last meeting when coordinated action was mentioned, this would give more support to the dollar," said Michael Klawitter, currency strategist at Dresdner Kleinwort in Frankfurt.

(For ANALYSIS on implications of the G8 meeting on the currencies, click on [ID:nT167228].)

However Bank of Japan Governor Masaaki Shirakawa said governments should not single out the impact on forex when guiding policy [ID:nTKF003210].

The euro has lost around four cents against the dollar since Monday as European Central Bank board members dampened expectations for a series of rate hikes after flagging a rise in July.

By 0852 GMT, the euro was down 0.3 percent at $1.5394 EUR=. The dollar index was up 0.2 percent at 73.959, up more than 2 percent on the week and heading for its biggest weekly gain since spring 2005 .DXY.

The dollar also edged up to 108.14 yen, its highest in nearly four months. For the week, the dollar is up 3 percent against the yen, poised for its biggest weekly gain in four years.