SINGAPORE, Jan 19 Reuters The dollar headed for a second weekly gain in a row on Friday as signs of resilience in the U.S. economy and caution about rate cuts from central bankers had traders dialling back expectations of swift and sharp falls in interest rates.

Weekly gains on the risksensitive Australian and New Zealand dollars of 1.6 and 2.3 are set to be the largest since November and July respectively. Markets price a 57 chance of a U.S. rate cut in March, down from 75 a week ago.

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 Westpac39;s head of foreign exchange strategy Richard Franulovich.

That, and a fresh bout of turbulence across China39;s property and financial markets has the dollar returning to form.

The dollar index is up 0.9 to 103.4 on the week and biggest loser has been the yen , which is now down 5 for the year so far as data and a deadly earthquake have sapped confidence the Bank of Japan is about to hike rates.

Data on Friday showed Japan39;s core inflation slowed to 2.3 in the year to December, its lowest annual pace since June 2022, taking the pressure off policymakers to make swift moves and dragging the yen about 0.2 lower to 148.44 per dollar.

The market39;s realisation that rates hikes will not be easy for the BOJ in the coming months and the coincident repricing of Fed rate cut risks have already been reflected in…