* Dollar index jumps 0.6% * Greenback highest since July 26 * Safe havens Japanese yen and Swiss franc hit * Risk-on, higher yields boost dollar * Canadian dollar feels second blow from weak domestic jobs report (Updates prices, market activity; new byline, changes dateline, previous New York/London) By David Henry NEW YORK, Aug 6 (Reuters) - The dollar made its biggest daily gain in three weeks on Friday after a U.S. government report showed jobs grew more than expected in July, pushing up bond yields and adding to arguments for faster tightening of U.S. monetary policy. The dollar index against major currencies was up 0.6%92.80 at 12:40 p.m. ET (1640 GMT). Against the safe havens of the Japanese yen and Swiss franc, the dollar had its biggest daily gains since June, reflecting a risk-on tone as well as the appeal of higher U.S. interest rates. The report on U.S. nonfarm payrolls showed jobs increased by 943,000 in July compared with the 870,000 forecast by economists polled by Reuters. The news rekindled dollar momentum, grounded in the middle of the week by statements from Federal Reserve Vice Chair Richard Clarida suggesting 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 they 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. On Friday the yield on the 10-year Treasury note touched 1.30%, up from 1.18% on Monday. The greenback rose 1% against the Swiss franc and 0.45% on the Japanese yen, which traded at 110.27 to the dollar. The euro fell 0.6% to $1.1757, down 0.6%. It was pressured earlier in the day by weaker than expected German industrial orders data. The British pound fell 0.4% to $1.387. In contrast to the U.S. payroll report, in Canada a domestic employment report showed far fewer jobs added in July than expected. The greenback rose 0.5% to 1.2561 Canadian dollars. Analysts have cautioned that markets will be looking for more evidence than one jobs report that U.S. yields will move significantly higher again. Friday's yield was still nearly one-half a percentage point lower than at the end of March. Reactions to 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 subsequent moves in the 10-year Treasury yield. Big moves across 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. When Fed policy makers are confident in U.S. employment gains to raise interest rates, the global economy could be strong enough to bolster riskier currencies instead of the dollar. 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. ======================================================== Currency bid prices at 12:40PM (1640 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 92.8030 92.2670 +0.59% 3.136% +92.8440 +92.2660 Euro/Dollar $1.1757 $1.1833 -0.64% -3.77% +$1.1834 +$1.1755 Dollar/Yen 110.2700 109.7850 +0.45% +6.73% +110.3500 +109.7100 Euro/Yen 129.64 129.89 -0.19% +2.14% +129.9600 +129.5900 Dollar/Swiss 0.9154 0.9065 +0.98% +3.47% +0.9155 +0.9065 Sterling/Dollar $1.3870 $1.3927 -0.40% +1.53% +$1.3932 +$1.3862 Dollar/Canadian 1.2561 1.2501 +0.47% -1.37% +1.2581 +1.2495 Aussie/Dollar $0.7355 $0.7403 -0.64% -4.39% +$0.7406 +$0.7347 Euro/Swiss 1.0762 1.0728 +0.32% -0.42% +1.0763 +1.0721 Euro/Sterling 0.8475 0.8495 -0.24% -5.17% +0.8501 +0.8471 NZ $0.7010 $0.7060 -0.67% -2.35% +$0.7062 +$0.7003 Dollar/Dollar Dollar/Norway 8.8835 8.8200 +0.65% +3.38% +8.8900 +8.8210 Euro/Norway 10.4470 10.4307 +0.16% -0.19% +10.4585 +10.4053 Dollar/Sweden 8.6663 8.6103 +0.01% +5.73% +8.6724 +8.6061 Euro/Sweden 10.1892 10.1886 +0.01% +1.12% +10.2013 +10.1605 (Reporting by David Henry in New York, Sujata Rao and Ritvik Carvalho in London, and Tom Westbrook in Singapore Editing by Andrew Heavens and David Holmes)