NEW YORK: The US dollar index jumped to a seven-week high on Friday after data showed that employers added far more jobs in January than expected, reducing the chances of near-term Federal Reserve interest rate cuts.

Nonfarm payrolls increased by 353,000 last month, beating economists’ expectations for a gain of 180,000. Average hourly earnings increased 0.6% after rising 0.4% in December.

It “blew away expectations,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. “The market has further cut the chances of a March cut and reduced the amount of cuts (it expects) the Fed will deliver this year.”

The dollar had weakened in recent days in line with falling Treasury yields, even after Fed Chair Jerome Powell on Wednesday said that a March rate cut was unlikely. Treasuries have benefited from safe haven demand due to renewed concerns about the financial health of US regional banks.

But the move in bonds and the dollar in large part also reflect repositioning, following a strong January for the greenback and higher Treasury yields during the month.

“After a big move in most of January, I would say there was some position adjusting,” said Chandler, adding that, following Friday’s jobs data, “I’m looking for a firmer dollar tone.” The dollar index was last at 103.98, the highest since Dec. 13 and up 0.90% on the day. The euro fell to $1.07840, down 0.80% on the day. The greenback rose to 148.30 yen, up 1.29%.

Traders are now pricing in an 22% chance of a rate cut in March, down from 38% on Thursday, and a 71% probability for May, down from 94%, according to the CME Group’s FedWatch Tool.

Sterling fell 0.81% to $1.26385. The British currency had gained on Thursday after the Bank of England kept interest rates at a nearly 16-year high on Thursday but opened up the possibility of cutting them as inflation falls.

In cryptocurrencies, bitcoin fell 0.17% to $43,033.