By Amanda Cooper

LONDON (Reuters) -The dollar steadied on Thursday as traders awaited more clarity on U.S. President-elect Donald Trump's proposed policies amid an uncertain outlook for interest rates, while bitcoin forged towards $100,000 for the first time.

Bitcoin has been on a blistering rally in the past few weeks on speculation that Trump will create an easier regulatory environment for cryptocurrencies.

It hit a record high of $97,902 on Thursday, underpinned by a report Trump's social media company was in talks to buy crypto trading firm Bakkt. It was last up 2.75% at $97,070.

The dollar index was steady at 106.55, and not far off last week's one-year high of 107.07.

"The U.S. is still the main driver, really. It feels a bit of a risk-off morning. The yen is the main winner so far, and I think that's this week, with Ukraine at front and centre at the moment," IG chief strategist Chris Beauchamp said, referring to an escalation in the conflict between Ukraine and Russia.

The euro, one of the main casualties of the dollar's post-election ascent, was down another 0.1% at $1.053275.

European leaders and policymakers are already grappling with the potential ramifications of Trump's proposed tariff hikes, while political uncertainty in the region's largest economies - Germany and France - is adding to that mix.

French far-right leader Marine Le Pen on Wednesday threatened to seek to topple Prime Minister Michel Barnier's fragile coalition government if her National Rally (RN) party's cost-of-living concerns were not incorporated into the 2025 budget.

"There are enough things to be concerned about to just tilt people towards being more cautious at the moment," Beauchamp said.

The seemingly unstoppable dollar has been helped by sharp swings in expectations for U.S. interest rates. The market currently sees just a 54% chance of a cut from the Federal Reserve next month, down from 82.5% only a week ago, according to CME's FedWatch Tool.

A Reuters poll showed most economists expect the Fed to cut rates at its December meeting, with shallower cuts in 2025 than expected a month ago due to the risk of higher inflation from Trump's policies.

TRUMP BUMP

The dollar has rallied more than 2% since the Nov. 5 U.S. presidential election, driven by an expectation that Trump's proposals on raising trade tariffs and cutting taxes could reignite inflation and limit the Fed's ability to cut rates.

At the same time, traders are sizing up what Trump's campaign pledges of tariffs mean for the rest of the world, with Europe and China both likely in the firing line.