NEW YORK (CNNMoney.com) - Treasury prices headed slightly lower Tuesday as investors prepared for the Federal Reserve's upcoming policy meeting and awaited clues about the future of the central bank's rate-hiking campaign.

The dollar fell against the euro and the yen.

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The benchmark 10-year Treasury note lost 3/32 to 95-7/32 to yield 5.13 percent, up from 5.11 late Monday.

The 30-year bond slipped 4/32 to 89-16/32, yielding 5.19 percent, little changed from the previous session. Bond prices and yields move in opposite directions.

The five-year note edged lower one tick to yield 5.01 percent, and the two-year note was relatively unchanged, yielding 4.97 percent.

In another session with no major economic data on tap, Treasury investors tried to position themselves before Wednesday's rate decision by the central bank and its accompanying statement.

"Some people think the new Treasury supply needs a little bit more of a (price) concession," Josh Stiles, senior bond strategist at IDEAglobal, told Reuters. "Others think there's no point in rushing in and buying now ahead of the Fed meeting, in case the Fed's statement does not reflect the prospective 'pause' that people have come to expect."

Market watchers widely expect the Fed to raise the target for its key short-term interest rate for the 16th straight time to 5 percent this week, but whether the central bank will keep raising rates beyond then remains unclear.

After a weaker-than-expected April jobs report was released Friday, interest rate futures indicated a 40 percent chance that the Fed will raise interest rates when it meets again in June

The Treasury Department also auctioned $21 billion of three-year notes Tuesday. The auction was met with solid overall demand, but indirect bidders - which include customers of primary dealers and foreign central banks - took on just $5.13 billion or 24.4 percent of the sale, well below the 35.6 percent average for last year, Reuters reported.

The next major economic report this week is U.S. retail sales for April, due on Thursday.

In currency trading, the euro bought $1.2753, up from $1.2706 late Monday. The dollar traded at ¥111.12, down from ¥111.69 in the previous session.

--from staff and wire reports

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