The dollar built on encouraging figures from the service sector in the US this afternoon.

Standing at 1.7530 to the pound and at 1.2025 against the euro, the dollar was bolstered by the figures from the Institute for Supply Management's non-manufacturing index.

According to the new data, the index rose from 56.8 in January to 60.1 in February, giving the greenback a lift.

Lehman Brothers David Mozina told Reuters the news was positive and would counteract a difficult week.

"This last week has been dominated by events outside the US and these events have been broadly dollar-negative," he said.

"But this data is a reality check not to lose track of the fundamentals here in the US, which provide dollar-buying opportunities.

"It's not as if conditions have fallen apart here and are less interest rate-supportive - far from it."

Earlier this week figures from the personal consumption expenditure index (PCE) released by the Commerce Department indicated prices had stabilised, shoring up the dollar after a turbulent week.

Rising energy prices, which touched near a four week high today on the back of fears over the security of oil outlets in Nigeria and elsewhere, had helped undermine confidence.