Investing.com - The U.S. dollar steadied Wednesday near to new 10-month highs on worries of higher U.S. interest rates, while the euro and sterling fell to six-month lows.

At 03:20 ET (07:20 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 105.967, having earlier climbed as higher as 106.30.

Kashkari hints at further Fed hike

The hawkish tone in the recent Federal Reserve meeting has been confirmed by Fed officials in recent days, as they flagged the possibility that the central bank would need to raise interest rates further after pausing its rate-hiking cycle last week.

That has sent U.S. Treasury yields soaring in recent days as traders adjusted for monetary conditions remaining tighter for longer than initially thought.

German GfK sentiment index set to fall in October

"This means that the chances of a recovery in consumer sentiment are likely to have fallen to zero before the end of the year," said GfK analyst Rolf Buerkl.

The euro is on course to lose more than 3% for the quarter, its worst quarterly performance in a year, while sterling is heading for a quarterly loss of more than 4%.

Yen close to intervention levels

This pair tends to be sensitive to changes in long-term U.S. Treasury yields, meaning that a break of the 150 level looks likely in the near-term, which could  attract intervention by Japanese authorities.