NEW YORK (CNNMoney.com) -- Bond prices dipped and the dollar rose Friday after a key inflation gauge offered no big surprises, soothing investors worried about next week's Federal Reserve meeting.

The 10-year Treasury note fell 10/32, or $3.12 on a $1,000 note, to yield 4.80 percent, up from 4.79 late Thursday.

The 30-year bond gained 1/32, or 31 cents on a $1,000 bond, to yield 4.92 percent, unchanged from the previous session. Bond prices and yields move in opposite directions.

The five-year note slipped 16/32 to yield 4.76 percent, while the two-year note fell one tick, yielding 4.83 percent.

The Labor Department said its core consumer price index, a closely watched inflation measure that excludes volatile food and energy costs, rose 0.2 percent in August, matching expectations. (Full story)

The report offered Treasury investors an encouraging sign that inflation may be easing after several months of troubling gains. Bond investors loathe inflation, which erodes the value of their fixed-interest paying investments.

The consumer price report also reinforced expectations for the Fed to keep interest rates steady at its meeting next Wednesday. At the Fed's last meeting, central bank policy makers left the target for a key interest rate unchanged after hiking rates 17 straight times since June 2004.

In currency trading, the euro bought $1.2666, down from $1.2719 late Thursday. The dollar bought ¥117.55, unchanged from the previous session.

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