NEW YORK (CNN/Money) - The dollar and most bond prices slipped into the minus column on Friday, but the 30-year bond kept up its long winning streak on expectations the Federal Reserve may take radical measures like buying bonds to stimulate the economy.

After months of dollar decline, the euro rose above $1.1747, its debut rate on January 4, 1999 when 11 countries merged their currencies.

The euro was trading around $1.1835 at around 3:00 p.m. ET. The dollar bought ¥116.87, down from ¥117.19 Thursday.

The 10-year note lost 5/32 of a point in price at 102-14/32 with a yield of 3.34 percent, slightly higher than 3.33 percent Thursday. The 30-year bond rose 3/32 to 118-1/32, yielding 4.26 percent, down from 4.29 percent yesterday.

The two-year note dipped 1/32 in price to 100-16/32 with a yield of 1.35 percent, while the five-year note dropped 3/32 of a point to 101-14/32, yielding 2.32 percent.

Ever since the Fed flagged its worries about deflation nearly three weeks ago, investors and traders have eagerly bought long-term Treasuries on expectations the central bank will keep official rates low for a long time to come and may even try to engineer long-term rates lower.

In response, the market has moved well ahead of any potential Fed actions. Since the central bank's May 6 statement, the 30-year bond has soared over 9 points, driving its yield 50 basis points lower to hit all-time lows of 4.23 percent. Prices move inversely to yields.

Even anticipation of an inflation slowdown soothes worries that accelerating consumer prices will erode the returns on fixed-coupon long bonds.

Such swings in the 30-year bond tend to be exaggerated because trading in the security has been spotty since the Treasury stopped issuing them in October 2001 in changing its debt management strategy.

But the benchmark 10-year note has been on a tear as well, gaining a full point since the Fed's statement and pushing its yield to a 45-year low of 3.29 percent before edging back up to 3.34 percent.

That drop in benchmark yields has already helped the economy by spurring corporate borrowing at such cheap levels while sparking another big wave of mortgage refinancings that will put extra cash in the pockets of consumers.

Even if the threat of deflation is seen as very remote, most market participants believe the Fed likely has at most one interest rate cut left in its arsenal before trying other stimulative policy measures such as buying Treasuries.

"Deflation is a very sensational story," said Anthony Karydakis, senior financial economist at Banc One Capital Markets.

With the federal funds rate at 1.25 percent, a move much below 0.75 percent or 0.50 percent could seriously disrupt money market funds, which rely on a positive interest rate to cover their operating costs.

"My sense is that all the Fed has left in terms of (cutting) the funds rate is...one more good move," said Karydakis. "Somewhere around 50 or 75 basis points (below the current 1.25 percent federal funds rate), they stop."

The bond market wrapped up trading early at 2 p.m. on Friday before shuttering for the Memorial Day holiday on Monday.

After a quiet week providing little economic data, the market will face a barrage of new figures next week: consumer confidence, durable goods orders, personal consumption and the monthly read on the Fed's favored inflation index, the core PCE.

Investors are on heightened alert. With core consumer price inflation running at its slowest annual pace in 37 years, the core PCE index will be sure to get close scrutiny.  

-- from staff and wire reports