Dollar jumps on jobs report to highest this week

• Jobs report adds to dollar gains for the week.
• Dollar index up nearly 0.5% on the day.
• Euro down 0.5% vs dollar.
• Dollar rises above 110 yen.

NEW YORK/LONDON, Aug 6 (Reuters) - The dollar doubled an earlier gain on Friday after a U.S. government report showed jobs grew more than expected, pushing up bond yields and adding to arguments for faster tightening of U.S. monetary policy.

The dollar index against major currencies was up 0.49% to 92.678 at 9:52 a.m. ET (1352 GMT).

The report showed that nonfarm payrolls increased by 943,000 jobs in July. Economists polled by Reuters had forecast a gain of 870,000.

The news rekindled dollar momentum from midweek when Federal Reserve Vice Chair Richard Clarida suggested that conditions for hiking interest rates might be met as soon as late 2022.

Fed officials have said that improving employment is critical to when they begin to pull back further on extra support the provided for the economy in the pandemic.

Clarida's remarks lifted Treasury yields after five weeks of declines while "real" yields, excluding inflation, are set to snap a six-week streak of declines .

The yield on the 10-year Treasury note reached as high as 1.29%, up from 1.179% on Monday.

Against the euro, the dollar rose to $1.1772, up 0.5%. The euro was pressured earlier in the day by weaker-than-expected German industrial orders data.

The greenback rose to 110.25 Japanese yen.

The British pound fell 0.3% to $1.3888.

Expectations for a strong set of U.S. jobs numbers had been heightened somewhat on Thursday when initial claims for state unemployment benefits fell by 14,000 to 385,000 in the week ended July 31.

Analysts have cautioned that the markets will be looking for more evidence that U.S. yields are going significantly higher again. Friday's yield was still nearly a half percentage point lower than at the end of March.

Reactions to the monthly jobs reports have changed more often than not this year in the days after the data was released, strategists at Wells Fargo Securities found when they looked at yields on 10-year Treasuries.

Big moves in exchange rates are unlikely until Federal Reserve officials make clear they are ready to lead other central banks in pulling back economic support, said Joseph Trevisani, senior analyst at fxstreet.com.

"The Fed is pumping far more money into the U.S. economy and, by diffusion, to the rest of the world than anybody else," Trevisani said.

Markets will next be watching for comments from Fed policymakers at the end of month at a symposium of central bankers in Jackson Hole, Wyoming.

A recent Reuters poll of strategists showed most predicting a dollar fall over the next year.

"We're in the phase in the business cycle where growth and global trade are going to remain relatively solid, and that's going to provide some downside bias for the dollar," said Vasilieos Gkionakis, global head of FX strategy at Lombard Odier Group.

(Reporting by David Henry in New York, Sujata Rao and Ritvik Carvalho in London and Tom Westbrook in Singapore; Editing by Timothy Heritage, Emelia Sithole-Matarise and Andrew Heavens)