* Lack of inflation pressures check gains
* Euro slips before ECB meeting next week
* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh
LONDON, Oct 20 (Reuters) - The dollar rose on Friday, on track for its biggest daily gain in more than two weeks, as progress on U.S. tax reforms raised prospects of a fiscal lift to the economy, though a lack of broad inflationary pressures checked gains.
Enhanced risk appetite helped boost European stock markets and the euro hit a 2-1/2-year high against the Swiss franc in Asian trade.
"Today's story has been all about the boost to the dollar from increased expectations of significant tax reforms and that is prompting investors to be cautious on the euro/dollar exchange rate before the ECB meeting next week," said Richard Falkenhall, senior FX strategist at SEB in Stockholm.
The dollar climbed 0.3 percent to 93.58 against a basket of currencies, its biggest daily rise since Oct. 5.
Senate approval on Thursday of a budget blueprint for the 2018 fiscal year revived expectations that tax cuts are on the way, though analysts cautioned against reading too much into the headlines.
The dollar has been supported this week and U.S. Treasury yields have risen -- with 10-year maturities hitting a 1-1/2 week high of 2.37 percent -- as investors bet a fiscal boost may push up inflation.
While 30-day correlations between the dollar index and 10-year U.S. Treasury yields are trading on the upper end of ranges, 90-day correlations are still at a low 0.2 percent.
Investors expect a fiscal boost to push up inflation, adding pressure on the U.S. Federal Reserve to raise interest rates, known as the "Trumpflation" trade.
"We have the Trumpflation trade story coming back overnight but we would be wary of buying the dollar solely on this move until we get more clarity, though we expect some general dollar strength going into the final quarter," said Thu Lan Nguyen, an FX strategist at Commerzbank in Frankfurt.
Price pressures remain subdued in the United States despite tight labour markets with core PCE inflation, one of the U.S. Federal Reserve's favourite measures, at a one-year low of 1.3 percent in August.
Analysts do not expect a rebound in price pressures, with CLSA strategists saying inflation has probably peaked in this cycle.
The dollar rose 0.8 percent on the day to of 113.30 yen .
Ahead of national elections in Japan on Sunday, surveys suggest Prime Minister Shinzo Abe's ruling coalition is on track to roughly match the two-thirds "super majority" it held in parliament's lower house before the snap vote was called.
The New Zealand dollar sank to a five-month low on concerns the new Labour coalition will take a harder stance on immigration and foreign investment than the outgoing centre-right government.
The dollar's rebound dragged the euro down half a percent to $1.1791 before a European Central Bank meeting next week where policymakers are seen cutting bond purchases but vote for an extension in stimulus.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.bi z / c m s / ? p a g e I d = l i v e m a r k e t s (Reporting by Saikat Chatterjee; editing by John Stonestreet)