GLOBAL MARKETS-Gathering rate hike hopes lift dollar, Treasury yields

(Adds Wall St turning higher, oil surrendering gains and late

prices)

* Dollar gains on Fed rate hike hopes, data

* U.S. Treasury short-term yields rise

* Wall St turns up in late trading

* Dollar pushes commodities to near six-year lows

By Michael Connor

NEW YORK, July 30 (Reuters) - The dollar touched one-week

highs and shorter-term U.S. Treasury yields rose on Thursday as

accelerating U.S. gross domestic product data encouraged bets

policymakers will start hiking U.S. interest rates as soon as

September.

Wall Street ended mostly higher but gains were muted by soft

corporate earnings. Oil prices surrendered early increases and

declined under the weight of the rising dollar.

The euro fell 0.50 percent against the dollar to $1.0928,

which helped the dollar index rise 0.55 percent at 97.496

after touching 97.773, its highest since July 22.

"The latest GDP report confirms the Fed's narrative that

the first-quarter weakness was transitory," said Ian Gordon, G10

currency strategist at Bank of America Merrill Lynch in New (KOSDAQ: 160550.KQ - news)

York. "The bar for them to hiking rates is not very high."

Data showed economic growth in the United States accelerated

in the second quarter, backed by solid consumer demand, to a 2.3

percent annual rate. While short of economists' expectations for

2.6 percent growth, the data still pointed to firming domestic

fundamentals.

The U.S. Federal Reserve on Wednesday described the economy

as expanding "moderately," with improvements in housing and the

labor market. That left the door open for a hike in interest

rates in September, which would be the first rise since 2006.

Treasury prices, which move in the opposite direction of

yields, were mostly off. Price declines were largest in 3-year

and 5-year maturities, while benchmark 10-year Treasuries

were last up 2/32 of a point in price, pushing the

yield to 2.2697 percent.

Wall Street's main indexes were mixed. The Dow Jones

industrial average finished down 5.01 points, or 0.03

percent, to 17,746.38, the S&P 500 rose 0.15 points, or

0.01 percent, to 2,108.72 and the Nasdaq Composite added

17.05 points, or 0.33 percent, to 5,128.79

Procter & Gamble, Facebook (NasdaqGS: FB - news) and Whole Foods

Market all fell after quarterly reports that left

investors wanting more.

Europe's main stock markets gained for a third day as

results from Siemens (BSE: SIEMENS4.BO - news) , Nokia (Swiss: 472672.SW - news) and Deutsche

Bank and a rise in euro zone-wide sentiment boosted

sentiment. The pan-European FTSEurofirst 300

closed up 0.6 percent.

With the dollar flexing its muscles again, commodity markets

were back under pressure, with copper, considered a

bellwether for global economic activity, trading very near a

six-year low at $5,259 a tonne.

The broad Thomson Reuters CRB commodities index

hit a fresh six-year low before recovering some ground. Gold

flirted with a 5-1/2-year low at $1,088 an ounce as its appeal

ahead of potentially higher global interest rates remained in

question.

Oil prices, smarting from rising U.S. shale oil output and

an easing of sanctions on Iran, posted early gains after an

unexpectedly large weekly drawdown in U.S. crude inventories but

finished off because of the stronger dollar.

Brent settled down 7 cents, or 0.1 percent, at

$53.31 a barrel, while U.S. crude closed lower by 27

cents, or 0.6 percent, at $48.52.

(Reporting by Michael Connor in New York; Editing by Bernadette

Baum and Meredith Mazzilli)