Private employers added 189,000 jobs in November, a report by a private employment service said on Wednesday, much higher than market expectations and the biggest monthly increase in a year.

Wall Street economists had expected private sector jobs of 50,000 last month. In October, new private sector jobs were revised to 119,000 from 106,000.

The ADP report suggests Friday's closely watched payrolls report from the government, which includes public and private sector hiring, could be much stronger than expected.

Assuming government payrolls expand by 19,000, which is the average monthly increase over the last 12 months, Macroeconomic Advisers said this implies an estimated 208,000 increase in total non-farm payroll employment.

According to the latest Reuters poll of economists, the U.S. Labor Department on Friday is expected to show 75,000 non-farm jobs were created in November, down from 166,000 the previous month.

While the market typically discounts the ADP report, a number this far out of the cloud could cause economists to revise their expectations for Friday, said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, New Jersey. We will also now have to keep an eye on the Fed funds futures markets go see if they price in a reduced expectations of a rate cut next week, he added.

The January fed funds future was still fully pricing in a 25 basis point cut at the December 11 meeting but indicated only a 38 percent probability of the central bank easing its benchmark federal funds rate by 50 basis points.

Just before the data the market was factoring in a 54 percent chance of a 50 basis point cut.

The dollar edged higher while U.S. Treasuries fell after the ADP report.

The report was issued by ADP Employer Services and jointly developed with Macroeconomic Advisers LLC.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Tom Hals)

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