* Dollar/yen sheds losses as equities rebound
* Underlying optimism on US tax reform supports dollar
* Bitcoin hits record high of $14,870 (Updates prices, adds comment, changes byline, dateline from LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 7 (Reuters) - The dollar rose to a two-week high against a basket of currencies on Thursday, recovering losses against the yen, on stronger risk appetite across markets and on optimism the United States will successfully push through a tax reform program.
The greenback slipped against the safe-haven yen on Wednesday after U.S. President Donald Trump said he would recognize Jerusalem as the capital of Israel, a move that imperiled Middle East peace efforts and provoked widespread condemnation. as global stock prices edged higher on Thursday after three days of losses, investors bought back the dollar, which gained 0.4 percent on the day at 112.72 yen JPY= .
Markets are now focused on Friday's U.S. non-farm payrolls report, with investors looking at 200,000 new jobs for November, according to a Reuters poll.
"Tomorrow's jobs report will play a significant factor in keeping the (dollar) rally alive and heightening hopes for an early 2018 rate hike," said Lennon Sweeting, chief market strategist at XE in Toronto.
Against a basket of currencies, the dollar hit a two-week high of 93.745. .DXY It was last up 0.1 percent at 93.696.
U.S. Senate Republicans agreed to talks with the House of Representatives on sweeping tax legislation on Wednesday, amid early signs lawmakers could bridge their differences and agree on a final bill ahead of a self-imposed Dec. 22 deadline. of U.S. tax reform is the main upside risk to economic growth, with far-reaching effects," wrote BofA Merrill Lynch analysts in a 2018 outlook.
But although most investors see the tax reform as a pro-growth policy that should support the dollar, not all analysts agree it would be straightforwardly dollar-positive.
"The corporate tax reform has the potential to have a significantly positive effect on the greenback, but due to other parts of the reform - those that are aimed at preventing tax base erosion," wrote Commerzbank (DE:CBKG) currency strategists in a note to clients.
The move higher in dollar/yen came, meanwhile, amid a surge in Tokyo shares, which had slumped the previous day on Middle East concerns.
But considering the Nikkei's .N225 gains - the index was up almost 1.5 percent - the dollar's rise versus the yen appeared limited.
The euro slipped to a two-week low of $1.1776 EUR= against a stronger dollar. It was last slightly down on the day at $1.1787.
Bitcoin soared to a record high of $15,000 on the Bitstamp exchange, continuing a surge from less than $1,000 at the beginning of the year. bid prices at 10:36AM (1536 GMT) Description
U.S. Close Pct Change
+112.7900 +112.2300 Euro/Yen
+132.9500 +132.4100 Dollar/Swiss
+0.9884 Sterling/Dollar GBP=
+1.3321 Dollar/Canadian CAD=
+1.2785 Australian/Doll AUD=
+0.8782 NZ Dollar/Dolar NZD=
All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX World central bank news CEN Economic Forecasts... ECON Official rates...INT/RATE Forex Diary.......MI/DIARY Top events........M/DIARY Diaries...........DIARY Diaries Index........IND/DIARY Press Digests.....PRESS Polls on G7 economies..SURVEY/ European markets......MARKETS/))
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates in 2017
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