EMERGING MARKETS-Peruvian sol plumbs new lows on election jitters, real rises

    * Brazil's 2021 inflation outlook jumps to 5% - survey
    * Mexican peso drops as economy shrinks more than expected
    * Chilean peso surges on copper prices, pension reform hopes

 (Recasts with Peruvian sol, updates prices)
    By Shashank Nayar and Ambar Warrick
    April 26 (Reuters) - Peru's sol currency tumbled to record
lows on Monday as a weekend poll showed a strong lead for
socialist presidential candidate Pedro Castillo, while Brazil's
real rose as high inflation pointed to tighter monetary policy.
    The sol dropped as much as 1.5% to a record low of
3.8428 to the dollar, extending losses into a seventh session as
Castillo appeared poised to take the presidency later this year.

    It ranks among the worst performing Latin American
currencies this year, despite a jump in copper prices, which
usually benefit the currency of the world's no. 2 producer of
the red metal.
    Colombia's peso was set for its worst day in nearly
five months, tracking a tumble in oil prices as a COVID-19
outbreak in major importer India hurt demand expectations.
    Mexico's peso fell 0.3% as the country's economy shrank more
than expected in February, mainly driven by weakness in the
manufacturing and service sectors, the national statistics
agency INEGi said.
    Sentiment over Latam currencies and assets remains on the
ropes, undermined by a vaccine shortage to protect against a
widely disruptive wave of COVID-19 infections. The resurgence
has stalled an ongoing economic recovery.
    On the other hand, Chile's peso firmed 1.1%, tracking
a sharp rise in copper prices as they hit decade highs.
    Chilean President Sebastian Pinera said the government will
launch its own bill to allow citizens to draw more from their
private pensions.
    Brazil's real firmed 0.9% against the dollar after a
survey of economists showed Brazil's 2021 inflation outlook rose
to 5% for the first time and the interest rate outlook hit a new
high of 5.5%, a sign that the central bank will raise rates
aggressively at its next policy meeting.
    The bank's rate-setting committee known as "Copom", which is
set to meet on May 4 and 5, is widely expected to repeat last
month's landmark 75 basis point hike, which would lift the
benchmark Selic rate to 3.50%.
    "The BCB (Central Bank of Brazil) has all but committed to
another 75 basis point hike, and we would want to see the BCB
restrain itself from shifting its tone more explicitly to the
dovish side given growth dynamics," said analysts at J.P.
    "This would be positive for the Brazilian real and could
lead to further outperformance, should Covid cases decline and
the BCB remain on the hawkish side."
    Key Latin American stock indexes and currencies:
                              Latest       Daily % change
 MSCI Emerging Markets         1361.55                   0.63
 MSCI LatAm                    2430.08                   0.54
 Brazil Bovespa              120535.81                      0
 Mexico IPC                   48933.60                  -0.32
 Chile IPSA                    4870.19                   0.64
 Argentina MerVal             47944.78                  1.204
 Colombia COLCAP               1287.49                   0.41 Currencies             Latest       Daily % change
 Brazil real                    5.4491                   0.86
 Mexico peso                   19.8690                  -0.27
 Chile peso                      703.9                   1.11
 Colombia peso                 3693.13                  -1.79
 Peru sol                       3.8377                  -1.32
 Argentina peso                93.2700                  -0.15

 (Reporting by Shashank Nayar in Bengaluru; Editing by Angus
MacSwan and Alistair Bell)