(Corrects to 'low' from 'high' in first paragraph)
* U.S. adds 157,000 jobs in January, jobless rate edges up
* Euro lifted by better-than-forecast euro zone PMI
* Yen continues weakening trend
By Wanfeng Zhou
NEW YORK, Feb 1 (Reuters) - The dollar fell to a 14-month low against the euro on Friday after U.S. jobs data reaffirmed expectations the Federal Reserve will maintain its stimulative policy and as euro zone factories had their best month in almost a year.
The U.S. economy added 157,000 jobs last month, the Labor Department said, and 127,000 more jobs were created in November and December than previously reported.
The unemployment rate, however, edged up 0.1 percentage point to 7.9 percent. The Fed repeated on Wednesday that it would keep overnight rates near zero until the unemployment rate hits 6.5 percent, as long as inflation does not threaten to exceed 2.5 percent.
"In my opinion, we must now focus on the unemployment level. Until that improves, I see no change in Fed policy," said Matthew Lifson, senior analyst and trader at Cambridge Mercantile Group in Princeton, New Jersey. "It looks like euro euphoria will continue today."
The Fed's bond-buying and loose monetary policies have pressured the dollar and analysts said the dollar will maintain a negative bias as long as the U.S. central bank continues on that path.
The euro rose as high as $1.3674, its strongest since November 2011. It was last at $1.3654, up 0.6 percent on the day.
Earlier, a Purchasing Managers' Index survey showed euro zone factories had their most resilient month in nearly a year during January, helped by solid German output.
News that banks will repay less than expected in European Central Bank three-year loans next week dented some demand for the euro, but losses were limited by optimism the worst of the region's debt crisis is over.
The dollar rose 0.3 percent to 92.03 yen, paring gains after the jobs data.
"There are some positive aspects to this report in terms of the revisions in November and December, but January's figure was slightly below expectations," said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
"Overall I don't think this shows an acceleration in the labor market trend. We have seen Treasury yields dip a little bit and that is putting pressure on dollar/yen."
Selling the yen has become a one-way bet, with Japanese Prime Minister Shinzo Abe heaping relentless pressure on the Bank of Japan to ease monetary policy aggressively to jolt the economy out of a decade-long malaise.
Later in the session, U.S. consumer sentiment and ISM data will be released. (Additional reporting by Gertrude Chavez-Dreyfuss in New York and Nia Williams in London; Editing by James Dalgleish)