NEW YORK (CNN/Money) - The U.S. dollar fell against the euro on Tuesday, after separate reports on the vast U.S. services sector and the job market gave a bearish sentiment to the currency ahead of Friday's widely anticipated September jobs report.

Meanwhile, Treasury prices traded nearly flat, with bond traders making no drastic moves ahead of the jobs report.

The dollar sagged against the euro but gained some strength against the Japanese yen.

In late New York trading, the euro bought $1.2320, up from $1.2285 late Monday, and the dollar bought ¥111.08, up from ¥110.96 late yesterday.

The benchmark 10-year note fell 2/32 to 100-19/32, to yield 4.18 percent, almost unchanged from Monday. The near-term range is likely to be 4.16 percent to 4.20 percent, analysts said.

The 30-year bond was down 2/32 in price at 106-16/32, yielding 4.93 percent, up from 4.92 percent. Five-year notes were down 1/32 at 99-25/32 to yield 3.42 percent, against 3.41 percent. Two-year notes were steady at a yield of 2.64 percent.

Bond prices and yields move in opposite directions.

Bond prices initially looked poised to rise as crude oil values accelerated to record highs, but buying interest cooled off, thanks to Dallas Federal Reserve Bank President Robert McTeer's upbeat comments in the afternoon.

At a speech in Texas, McTeer said the U.S. economy is back on track after the summer "soft patch." He said the current federal funds rate of 1.75 percent is not appropriate for an economy growing at 4 percent.

Earlier, the Institute for Supply Management's services index for September, while weaker than forecast at 56.7 and the lowest since May 2003, was still consistent with a growing economy.

Any reading above 50 reflects growth in the services sector, which includes everything from banks to airlines and accounts for about 80 percent of the U.S. economy.

Also on Tuesday, the Challenger layoff report suggested that the U.S. jobs market stumbled in September, creating a few jitters before Friday's payrolls data.

Planned job cuts were at an eight-month high of 107,863, while hiring was at a trickle, the firm said.

"Disturbingly, the spread of job losses was greater -- the number of industries laying off more than 10,000 employees rose from one in August to four," Drew Matus, U.S. financial markets economist at Lehman Brothers, told Reuters.

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Still, bond dealers braced for bad news on the layoff front, after a string of recently announced cuts by companies such as cell phone giant Motorola and Delta Airlines .

The median forecast for Friday's jobs report has payrolls rising 148,000, against August's 144,000 increase. But forecasts range widely.

Energy prices were in the spotlight again Tuesday, as the price of New York light crude set a new record high of $51.29 a barrel, while heating oil futures were also at a new high.

The current oil price acts as a de facto tax increase on U.S. consumers, McTeer stated on Tuesday. High energy prices also threaten to sap business confidence and may slow hiring.  

-- from staff and wire reports