NEW YORK (CNN/Money) - Treasury prices dipped Thursday after little interest in a short-term debt auction capped gains made earlier in the session after two government reports suggested economic growth might have slowed.

Meanwhile, the dollar rose against the euro and the yen

The benchmark 10-year note dropped 5/32 of a point to 97-23/32 to yield 4.28 percent, up from 4.26 percent late Wednesday. The 30-year bond eased 2/32 of a point to 110-20/32 to yield 4.66 percent, up from 4.65 percent late Wednesday. Bond prices and yields move in opposite directions.

The five-year note lost 5/32 of a point to yield 3.90 percent, while the two-year note fell 2/32 of a point to yield 3.48 percent.

Bonds dipped after indirect bidders, including customers of primary dealers and foreign central banks, picked up just $7.35 billion, or 31 percent, of the Treasury's latest two-year note auction.

"There's nothing positive to be said about it," Andrew Brenner, head of fixed income at Investec U.S., told Reuters. "What's happening now is foreigners are looking to buy higher yielding paper, including agency and corporate debt."

The auction rekindled fears that demand for U.S. debt from foreign central banks is waning. Overseas central banks hold around $1.07 trillion of Treasuries, or more than a quarter of the entire market.

Earlier this week the bond market was shaken by reports that South Korea's central bank was planning to diversify its predominately dollar-denominated portfolio.

But Brenner said concerns about a wholesale withdrawal from U.S. assets has been overplayed.

Economic data released earlier in the day had a passing positive effect on the market, with bond prices briefly rising on soft durable goods figures.

The Labor Department said new claims for state unemployment benefits rose to 312,000 in the week ended Feb. 19 from a revised 303,000 the prior week.

But the four-week moving average of jobless claims, which smoothes out wrinkles in the weekly numbers, fell for the second straight week, dropping to 308,750 from 312,000 the week before. It was the lowest since the week of Nov. 4, 2000, when the U.S. economy was expanding solidly.

The Commerce Department said new orders for long-lasting U.S.-made goods fell 0.9 percent last month as demand for autos and civilian aircraft fell, the government said Thursday.

However, the durable goods report was only soft at first glance. Excluding the often-volatile transportation category, durable goods orders climbed 0.8 percent.

In currency trading, the dollar gained against the euro and the yen after being hammered the previous day.

The euro bought $1.3201, down from $1.3224 late Wednesday, while the dollar bought ¥105.43, up from ¥104.89 late Wednesday.

The correction gathered momentum as the market digested the day's economic releases.

"It's a good move on the day for the dollar but not a massive move; I wouldn't read too much into this," a senior currency trader in New York told Reuters.