Central European markets tracked gains in Polish assets which were buoyed by an unexpected rating outlook upgrade by Standard & Poor's on Friday. Polish assets, which have generally underperformed their regional peers this year, have climbed since S&P unexpectedly raised the outlook on its 'BBB+' country rating to stable from negative.
European Central Bank (ECB) bond purchases have fuelled demand for eastern European sovereign debt, and the Central Bank is widely expected to announce a six-month extension to the programme after a policy meeting on Thursday.
On Wednesday the zloty eased further from multi-month lows, extending gains against the euro for a second consecutive day. EUR/PLN was down 0.46 pct trading at 4.4359 by 1115 GMT. Poland's 10-year government bond yield retreated to 3.54 percent at around 1115 GMT from highs of 3.63 percent earlier on the day.
"This environment is still rather negative for the zloty although it may perform a little bit better than other currencies in the region thanks to S&P's outlook hike," said Piotr Poplawski, senior economist at ING BSK in Warsaw.
Expectations of a Federal Reserve interest rate hike next week kept a lid on gains as a rise in US rates would make assets in the region less attractive.
At 1200 GMT, FxWirePro's Hourly Currency Strength Index of US Dollar was neutral at -43.5753. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.


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