BUDAPEST: The Polish zloty led Central European currencies modestly higher in early trade on Monday, extending last week's gains helped by improved sentiment on the region's stock markets.
Stocks in Central Europe opened mostly firmer with the Warsaw bourse leading the pack with its main index up by half a percent.
"Today, we expect PLN to appreciate against EUR (below 4.1480 at the end of the day), which should be driven by the growing stocks," Bank Zachodni WBK said in a note.
On Friday, Polish labour market data surprised on the upside, with corporate sector wages rising by an annual 7.3 percent in January - above analysts' expectations of 6.85 percent.
Corporate employment rose by 3.8 percent year-on-year to 6.19 million people in January, also above forecasts.
Piotr Poplawski, a senior economist at ING BSK, said the zloty's moves were small on Monday, and with US markets closed for holidays, volumes were expected to be low.
On Tuesday, Poland will publish January retail sales and industrial output data, which are expected to underpin a healthy growth in the Polish economy.
Analysts had forecast an annual 7.3 percent growth in retail sales for the first month of the year.
Strong growth in the region's economies, and solid economic fundamentals have helped its assets withstand the big selloff on global markets, with Polish and Hungarian stock markets only suffering minor losses so far this year.
A strong eurozone outlook also helps the region, which has close trade links to the euro area, especially to Germany.
"Flash PMI and Ifo (data this week) should be a a reminder of the strong underlying macro story for Europe (yet may be weaker than previous readings)," Bank Zachodni said.
At 0836 GMT the Czech crown was 0.1 percent firmer at 25.32 to the euro, while the Hungarian forint was also 0.1 percent higher.
S&P affirmed Hungary's BBB- credit rating on Friday, and the outlook remained positive.
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