Mail rejected because of incorrect server domain

Sorry, this is a newby question, hope it is simple!

I am getting mail returned from my hosted domains (Wordpress website is sending the mail) because the sending server name in the email doesn't match the hosted domain name.

<target_email_address.com>: host mx.receiving_mail_server[200.100.100.100] said: 553
    #5.1.8 Domain of sender address <sendername@host1.localdomain> does
    not exist (in reply to MAIL FROM command)

It is using "@host1.localdomain" literally, instead of "@mydomain.com"

Can someone please tell me where I can configure the sending mail server name in outgoing mail for hosted domains.

Thanks