UPDATE 1-Argentine peso makes gains after two-day slide

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BUENOS AIRES, April 26 (Reuters) - Argentina’s peso gained around 2 percent on Friday morning, traders told Reuters, recovering after a sharp fall this week took the embattled currency to record lows against the dollar.

Argentine bonds and the peso have been hammered this week as uncertainty over a biting recession and high inflation frayed investor nerves about political upheaval in Latin America’s No. 3 economy ahead of elections this year.

The rise will come as welcome relief for Argentine President Mauricio Macri after a week in which domestic media has run blanket coverage about a renewed crisis, threatening to derail his plans for re-election and bolstering his political rivals.

The peso fell 2.48 percent on Thursday after a 3.53 percent slide the day before, while yields on sovereign bonds spiked as investors grew jittery about a change of administration.

The currency strengthened to 44.2 per dollar on Friday, which traders said was supported by sales of futures contract, government interventions in the market and higher interest rates on short-term “Leliq” notes.

Most economists said that the market turmoil had been linked to a poll earlier in the week that had suggested Macri’s arch rival, populist ex-President Cristina Fernandez de Kirchner, could beat the pro-market leader in an election run-off.

Macri defended the government’s economic reforms on Thursday, saying they had established an independent central bank and a balanced budget versus money printing and fake data. He added change took time and volatility was to be expected.

“The markets are different, they are types who are behind a computer in a faraway place, who buy, sell and have a short-term, opportunistic vision,” he said in comments made to local radio and circulated by his office.

“There is a huge majority of Argentines who do not want to go backwards and who want to go into the future.” (Reporting by Walter Bianchi and Adam Jourdan Editing by Chizu Nomiyama and Susan Thomas)