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The Dollar strengthened following a string of economic data releases that confirmed the U.S. economy remains robust and offers scope for the Federal Reserve to raise interest rates on at least two further occassions.

U.S. bond yields rose with the release of the ISM non-manufacturing PMI for June which came in above consensus estimates (51.0) at 53.9 as activity accelerated from May (50.3). "The June Services PMI indicates the overall economy is growing for the sixth consecutive month after one month of contraction in December," said the ISM.

ISM non-manufacturing prices paid read at 54.1, which was above what markets were expecting at 53.3, and hinted at underlying inflationary pressures in the services sector.

The higher bond yields boosted the Greenback and the Pound to Dollar exchange rate (GBPUSD) retreated back to 1.27, having registered a high at 1.2780 earlier in the day.

"The U.S. dollar, already finding some strength from the hawkish FOMC minutes, got another shot in the arm as both the ADP private sector payrolls report and the ISM survey beat expectations. The dollar bears who were looking for some substantial downside surprise in data, were left disappointed. The dollar's reaction was a swift one, as it rallied across the board," says Fawad Razaqzada, analyst at City Index.

The firm data impulse suggests there is ample scope for the Federal Reserve to raise interest rates further to guard against inflation with the knowledge the economy remains in a robust shape.

The Euro-Dollar rate relinquished a daily high at 1.09 to trade at 1.0849 in the wake of the data as the short-term downtrend remains firmly in place.

It was a carnival of data from the U.S. today, with all releases confirming the U.S. economy remained in rude health in early summer:

The S&P Global Composite PMI read at 53.2, ahead of expectations for 53.0.Jobless Claims 4-Week Avgerage read at 253.25K, below consensus at 256.64K and below the previous reading of 256.75K.Initial Jobless Claims read at 248K, above consensus at 245K and above the previous week's 236K.The U.S. ADP Nonfarm Employment Change read at 497K, which was far stronger than the 228K the market was looking for and the previous month's 267K.All eyes now turn to the U.S. non-farm payroll release due Friday which should give a fresh steer as to how the labour market is evolving.

Bear in mind that economists consistently underestimated the strength of the labour market with estimates coming in below the actual figure for 14 months in succession.

Another strong reading that can further support the Dollar into the weekend could therefore be on the cards.

"Incorporating updated information, we have revised our forecast for June nonfarm payrolls to 260K from 245K," says Jay H. Bryson, Chief Economist at Wells Fargo.