Dollar extends recovery as US yields climb

Dollar gained ground in European trade for another session off four-week lows as US treasury yields surged following bullish remarks by Fed officials. 

Traders now await important US services data later today to gauge the health of the economy in the third quarter.

The Index

The dollar index rose 0.2% on Wednesday, after rising 0.9% yesterday, away from four -week lows at 105.05, and the first profit in five sessions. 

US Yields

US 10-year treasury yields rose 0.5% today for the second session off four-month lows at 2.516% following bullish remarks by Fed officials. 

Both Chicago and San Francisco Fed governors said they are committed to the track of hiking rates to levels that might limit economic growth.

Traders now see a 44% chance the Fed might hike rates by 75 basis points at the September meeting.

US Data

US Markit services index is expected down at 47 in July, down from 52.7 in June.

US factory orders are expected up 1.3%, slowing down from 1.6% in May.