(Adds background, graphic)
NEW YORK, July 8 (Reuters) - The interest rate that banks charge each other to borrow dollars for three months posted its biggest rise since December on Monday following a solid U.S. June payrolls report that reduced expectations the Federal Reserve would lower rates at a swift pace.
The three-month London interbank offered rate increased to 2.33775%, up 2.64 basis points which was its steepest one-day jump since a 3.41 basis-point gain on Dec. 20.
LIBOR is the benchmark rate for $200 trillion worth of dollar-denominated financial products, mainly interest rate swaps and floating-rate loans.
On Friday, the U.S. Labor Department said domestic private and public employers added 224,000 workers last month, which was more than the 160,000 projected by economists polled by Reuters.
The increase in nonfarm payrolls rebounded from the 72,000 jobs created in May.
The rebound in payroll growth in June diminished bets the Federal Reserve would reduce key lending rates by 50 basis points at its policy meeting at the end of July. However, interest rates futures suggest traders are fully positioned for a quarter-point rate decrease.
Reporting by Richard Leong Editing by Paul Simao and Alistair Bell