* Dollar supported as Obama starts meeting lawmakers
* Fed's minutes shows most board members still expected tapering to begin this year
* Yellen nomination also seen as removing one uncertainty in uncertain world
* British pound loses steam after weak UK data
* Aussie awaits key job data
By Hideyuki Sano
TOKYO, Oct 10 (Reuters) - The dollar regained some footing against major currencies on Thursday, as hopes grew of a break in the U.S. fiscal standoff with Washington finally showing signs of pulling the world's biggest economy from the brink of an historic debt default.
The dollar rose 0.2 percent against the yen in early Asian trade to 97.53 yen, up about a full yen from two-month low of 96.55 yen hit on Tuesday.
The dollar index held firm at 80.41, extending its gains from an eight-month low of 79.627 hit a week ago. The euro was slightly easier at $1.3517 after having fallen 0.35 percent overnight.
"There are hopes that Washington is moving on the deadlock over the government shutdown and debt ceiling. The dollar looks set to gain if these problems are solved," said Sho Aoyama, senior market analyst at Mizuho Securities.
House Democrats will journey to the White House later on Wednesday, and House Republican leaders will make the visit on Thursday as the search intensifies for a way to break the impasse.
Some Republicans and Democrats also floated the possibility of a short-term increase in the debt limit to allow time for broader negotiations on the budget.
The U.S. currency received an additional boost after the minutes of the Federal Reserve's September meeting revealed the decision not to slow stimulus was a "close call" and that most board members supported tapering bond buying later this year.
Earlier on Wednesday, the dollar also gained on the news that Federal Reserve Vice Chairwoman Janet Yellen will be nominated as the next head of the U.S. central bank.
Although the news could have been seen as negative for the dollar given that investors regard Yellen as a policy dove, it helped soothe sentiment as the nomination was seen as reducing uncertainty in a market gripped by fear of a U.S. debt default.
U.S. Treasury Secretary Jack Lew has said it will run out of additional borrowing authority on Oct 17.
Many investors are now looking to his testimony before the Senate Finance Committee later in the day on his latest estimate on the Treasury's funding positions as well as possible contingency plans.
Elsewhere, the British pound lost steam following an unexpected fall in British industrial output and a wider-than-expected trade deficit pushed sterling.
The pound stood at $1.5957 after having fallen 0.8 percent on Tuesday to a three-week low of $1.5917.
Against the euro, it stood near five-week low of 84.875 pence per euro, and was last trading at 84.72.
The immediate focus is on the Bank of England's policy announcement at 1100 GMT, though no policy change is expected.
The Australian dollar held firm at $0.9448, keeping its moderate uptrend so far this month intact but it faced a major test at 0030 GMT, when the country's payroll data will be released.
Economists expect a job increase of 15,000 in September after surprise fall of 10,800 in August.