LONDON/SINGAPORE - The dollar was on track to rise for a second straight week on Friday as signs of resilience in the U.S. economy and pushback from central bankers has caused traders to dial down expectations of swift and sharp falls in interest rates.

The euro has fallen 0.6% this week, helping push the dollar index to a 0.9% gain.

Japan's yen has been the biggest loser: it is now down around 5% for the year so far as tepid economic data and a deadly earthquake have sapped confidence that the Bank of Japan is about to hike rates.

"The thumping message from U.S. activity data and central bankers is that markets are too aggressively priced for rate cuts in 2024, both on timing and in magnitude," said Westpac's head of foreign exchange strategy Richard Franulovich.

"That, and a fresh bout of turbulence across China's property and financial markets has the dollar returning to form."

On Friday, the euro was roughly flat at $1.0878, as was the dollar index, at 103.38.

"We're kind of stuck in this range here in euro," said Erik Nelson, macro strategist at Wells Fargo. "As much as has happened, the euro has barely moved this year."

Nelson said investors were waiting for data on the Federal Reserve's preferred measure of inflation to be released on Friday next week.

The yen was also little changed at 148.02 to the dollar, having risen but then fallen back after data showed Japan's core inflation rate slowed to 2.3% in the year to December. That was its lowest annual pace since June 2022, taking the pressure off policymakers to make swift moves.

Britain's pound was 0.16% lower at $1.2685. Data on Friday showed UK retail sales slumped by the most in three years in December.

Investors now expect 140 bps of interest rate cuts from the Fed this year, down from 165 bps a week earlier. They also see a roughly 54% chance the first cut comes in March, from 77% a week ago.

U.S. labour market data released on Thursday was strong, with weekly jobless claims dropping to their lowest level in nearly 1-1/2 years, adding to the pressure on market rate-cut wagers.

Federal Reserve Governor Christopher Waller said on Tuesday the U.S. economy's strength gives policymakers flexibility to move "carefully and slowly", which traders took as pushing back at pricing for a speedy fall in rates.

Two-year Treasury yields, which track short-term interest rate expectations, are up 21 basis points this week to 4.348%.

Deepening malaise in China's property markets rattled investors, who sold mainland shares to multi-year lows and the yuan currency to an almost two-month low of 7.197 per dollar, drawing state-bank buying to support it.

Bitcoin hit a five-week low at $40,484 overnight as traders have taken profits following the U.S. approval of spot bitcoin exchange-traded funds.

(Reporting by Harry Robertson in London and Tom Westbrook in Singapore; Editing by Jamie Freed and Susan Fenton)