NEW YORK (CNNfn) - Treasury securities rose Friday after the latest batch of economic data suggested the economy's growth rate is easing enough to keep Federal Reserve inflation fighters on the sidelines in two weeks.
In the currency markets, the dollar fell against the euro and yen.
The fixed-income market, ever sensitive to higher inflation, also benefited from a drop in oil prices, which jumped to a two-month high earlier this week. And a faltering U.S. stock market lifted bonds as money fled equities for the relative safety of government securities.
"As far as bond-land goes, everything's fine," said Bruce Alston, who manages $1.5 billion in fixed-income securities for Value Line Asset Management.
Just before 3:15 p.m. ET, the price of the 10-year note gained 15/32 to 103-23/32. Its yield, which moves inversely to its price, fell to 5.98 percent from 6.04 percent Thursday. The 30-year bond jumped 24/32 to 105-6/32, its yield tumbling to 5.87 percent to 5.93 percent Thursday.
 In the latest sign the economy is cooling, housing starts fell 3.9 percent last month to an annual rate of 1.59 million, the Commerce Department said, the lowest rate since last June. Building permits also dropped.
"The housing numbers were softer so we continue to grind higher here," said Bill Kirby, head of government trading at Prudential Securities.
The housing number, coupled with the slowdown in retail sales and the job market, are "sending the message that the economy is at least in the early stages of a slowdown," Wayne Ayers, chief economist at FleetBoston, told CNNfn's Before Hours.
Meanwhile, the price of light sweet crude fell as low as $29.10, off $1.25 from $30.35 Thursday, on hopes that OPEC will boost supply at its meeting in Vienna, Austria, next week.
Signs have emerged that the Federal Reserve's six interest rate hikes in a year are succeeding in slowing the economy. In addition, the stock market's slide in the last three months may be crimping consumer spending.
"Obviously, the tech wreck has some effect on the consumer because the slowdown has affected (spending)," Ron Hill, partner at Brown Brothers Harriman, told CNNfn's Before Hours. "The Fed has less work than we had thought before."
 Looking ahead, next week's calendar brings only one key economic indicator, April's trade deficit. A such, trading action could be slow.
"The market will just meander next week," Value Line's Alston said.
Dollar weakens
In the currency markets, the dollar edged lower against the euro and yen as trader bet U.S. economic growth will slow.
Just before 3 p.m. ET, the euro rose to 96.47 cents from 95.41 cents Thursday, a 1.1 percent gain. The dollar fell to 106.25 yen from 106.44 yen.
 "With little in terms of fresh news or developments overnight, traders appear content to trade the U.S. dollar within its current ranges against the world's major currencies," wrote Alex Beuzelin, market analyst at Ruesch International, in a note to clients Friday.
Still, the dollar has fallen against the major currencies in recent weeks on evidence that growth of the world's largest economy will be outpaced by its overseas counterparts. This has helped the euro, which after falling below 90 cents this spring has surged higher this month.
Marc Chandler, chief currency strategist at Mellon Bank, sees the regional currency by the end of summer moving above the psychologically significant $1 mark, a point it first fell below last December. 
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