Ukraine dollar bonds fall to more than two-week low

Ukraine's sovereign dollar bonds fell further on Tuesday, hitting a more than two-week low, as optimism over a peace deal continued to fade.

The war-torn country's debt has slowly shed some of the gains it made earlier this summer on hopes that an August 15 meeting between U.S. President Donald Trump and Russian President Vladimir Putin could yield a peace deal.

The 2035 and 2036 maturities, which have no coupons but pay more if the country's economy outperforms, fell the most, with the latter shedding 1.7 cents to bid at 52.55 cents on the dollar, below the 59.50 peak hit on August 20.

"We see continued downward correction in bonds, as the news flow has not been supportive lately," Aberdeen portfolio manager Viktor Szabo said.

Szabo added that the bonds linked to economic performance were more sensitive to Ukraine's outlook, and had also outperformed in the run-up to the Trump-Putin meeting.