By Deborah Levine
NEW YORK (MarketWatch) -- Treasury prices turned higher and the dollar reversed to a gain against a basket of currencies in mid-morning trading on Friday as traders resumed selling riskier assets in favor of those perceived as safer amid concerns that the problems facing European nations besides Greece haven't disappeared. "European contagion isn't going away overnight, said Tom di Galoma, head of U.S. rates trading at Guggenheim Partners. "Flight to quality is the name of the game right now." Yields on 10-year notes (UST10Y 3.39, 0.00, -0.06%) , which move inversely to prices, fell 2 basis points to 3.37%, a new low for 2010. Yields had been down 8 basis points earlier. The dollar index (DXY 84.78, -0.11, -0.13%) , a measure of the U.S. unit against a basket of six major currencies, traded at 84.930, compared to 84.778 in late North American trading Thursday. The euro (CUR_EURUSD 1.2662, +0.0033, +0.2613%) pared gains to trade at $1.2666, erasing much of an earlier gain but still up from $1.2639 lateThursday, when it hit a 14-month low.
