Dollar jumps as employers add more jobs than expected in January

(Photo by Chung Sung-Jun/Getty Images)

The dollar jumped on Friday after data showed that employers added significantly more jobs in January than economists expected, potentially giving the Federal Reserve more leeway to keep hiking interest rates.

The Labor Department's closely watched employment report showed that nonfarm payrolls surged by 517,000 jobs last month. Data for December was revised higher to show 260,000 jobs added instead of the previously reported 223,000.

Average hourly earnings rose 0.3% after gaining 0.4% in December. That lowered the year-on-year increase in wages to 4.4% from 4.8% in December. Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs and wages advancing 4.3% year-on-year.

The dollar was last up 0.55% on the day against a basket of currencies at 102.35. The euro fell 0.53% to $1.08545. The dollar gained 0.80% against the Japanese yen to 129.74.