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Peru's sol soars as socialist Castillo loses ground to right-wing Fujimori

FILE PHOTO: People protest against Peru's presidential socialist candidate Pedro Castillo, in Lima

By Marco Aquino

LIMA (Reuters) - Peru's sol currency on Monday posted its biggest daily gain in just over five years after opinion polls showed the gap closing between socialist front-runner Pedro Castillo and the right-wing Keiko Fujimori ahead of June 6 presidential elections.

Two new polls released Sunday and Monday showed Castillo, a little known schoolteacher from rural Peru, had lost almost his entire lead over Fujimori, a three-time contender for the presidency.

The sol closed up 2.36%, its strongest daily performance since April 2016.

Castillo's surprise appearance on the ballot had rattled many investors and miners, cautious of a sharp left turn in the world's No. 2 copper producer, which will be electing its fifth president in the past five years after a constitutional crisis last year.

The recent polls appeared to assuage some of their concerns. A survey from Peru's Company for Market Studies and Public Opinion (CPI) found Castillo's lead had shrunk to just 2.2 percentage points, compared to a 12.4 percentage point gap in the group's previous poll. The poll of 1,600 people was conducted between May 6-8, with a margin of error of 2.5%.

Another poll, published Sunday by the Institute of Peruvian Studies (IEP) put the gap between the two candidates at 6.2 percentage points, versus 20 points two weeks ago.

On Friday, the international Datum reported that the advantage was five percentage points.

Castillo, who has pledged to redraft Peru's constitution to give the state a more dominant role in the economy, has recently moved to moderate his stance in some areas to help win over centrist and center-left voters.

But Fujimori, the scion of a powerful political family whose father is an ex-president now in prison for corruption and human rights abuses, has ratcheted up her criticism of Castillo as a left-wing extremist who could jeopardize the Andean's nation's economic progress in recent years.

(Reporting by Marco Aquino; Writing by Dave Sherwood; editing by Richard Pullin)