NEW YORK: The dollar jumped on Friday after data showed that US 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. The department revised December data 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 a gain of 185,000 jobs and a 4.3% year-on-year jump in wages.

It is a “monster number,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

The dollar was last up 1.12% at 102.92 on the day against a basket of currencies, the highest since Jan. 12 and it is on track for its best day since Sept. 23. The euro fell 0.98% to $1.08040. The dollar gained 1.82% against the Japanese yen to 131.20, the highest since Jan. 18 and is on track for its best day since June 17. Sterling fell 1.39% to $1.20550, the lowest since Jan. 6 and its worst day since Dec. 15.

The surprisingly strong payrolls number reversed a move from Wednesday when traders raised bets that the US central bank would stop hiking borrowing costs after a widely expected 25-basis-point increase in March.

“After the Fed meeting it looked like markets had the advantage - it was still pricing in a rate cut, they took interest rates down, and they took the dollar down, and now I think 48 hours later the Fed looks like they might have the upper hand again,” Chandler said.