(Updated at 1200 EDT)

By Karen Brettell

Aug 21 (Reuters) - The dollar fell to a more than

one-year low against the euro and sterling on Wednesday after

data showed employers added 818,000 fewer jobs in the year to

March 2024 than previously thought.

The data was released later than its scheduled 1000 EDT

time, leading to market confusion and some choppy trading.

"It suggests the labor market was not as strong as the

Fed believed at the time and has been communicating. But it's

less clear what it means for the outlook going forward," said

Vassili Serebriakov, an FX strategist at UBS in New York.

"This is very consistent with the Fed starting to cut

rates. But it's harder to say what it means for the pace of

easing and other details," he added.

Traders will focus on comments by Fed Chair Jerome

Powell on Friday at the Kansas City Fed's Jackson Hole economic

symposium for any new clues on his view of the labor market and

whether he references Wednesday's data.

Markets in particular are looking for clarity on the

likely size of a rate cut next month, and whether borrowing

costs are likely to be lowered at each subsequent Fed meeting.

Traders are pricing in a 33% probability of a 50 basis

point cut, little changed from before the jobs data, and a 67%

chance of a 25 basis point reduction, according to the CME

Group's FedWatch Tool.

"It got easier for the Fed to cut rates now and through

year-end but I don't think it makes a strong case for 50 basis

points," said Adam Button, chief currency analyst at ForexLive

in Toronto.

"We know that it was a year of solid economic growth, that

company profits were fine and that the economy grew at a good

clip for the year ending in March," Button said.

Fewer-than-expected job gains in July and an unexpected

increase in the unemployment rate led traders to price for

larger rate cuts on concern the United States is facing an

imminent recession.

Those concerns were rowed back by better data, including a

strong retail sales report for July and also

higher-than-expected shelter inflation for the month.

But markets remain highly sensitive to jobs data for any new

signs that the economy is worsening at a quicker pace.

The Fed is due to release the minutes from its July 30-31

meeting on Wednesday.

August employment and inflation data will be released after

Powell's speech but before the September meeting.

The dollar index was last down 0.16% at 101.22, the

lowest since Dec. 29. The euro rose 0.11% to $1.1142,

the highest since July 2023.

Strength in the euro may be stretched after the recent

rally, said UBS' Serebriakov.

"You haven't seen a big move in U.S. rates. I don't

think the European data is especially positive for the euro. So,

it seems still a bit of a technical move in FX," he said.

Sterling strengthened 0.36% to $1.3076, also the

highest since July 2023.

The dollar weakened 0.05% to 145.18 Japanese yen,

the lowest since August 7.

Bank of Japan Governor Kazuo Ueda is expected to discuss the

central bank's decision last month to raise interest rates when

he appears in parliament on Friday.

The Bank of Japan will raise interest rates again by

year-end, according to more than half the economists in a

Reuters poll published on Wednesday, with those who had a view

on which month leaning towards a December increase.

Data next week is expected to show Japan's consumer

inflation rate picked up in July for a third consecutive month,

a Reuters poll of 18 economists showed.

In cryptocurrencies, bitcoin rose 0.31% to $59,498.