Ukraine's dollar bonds slide as hopes for peace fade again

Aug 21 (Reuters) - Ukraine's dollar bonds suffered their largest losses in more than four months on Thursday as the prospect of a peace deal with Russia appeared to fade.

The bonds had rallied, gaining as much as 14 cents since late July, on optimism that U.S. President Donald Trump's meeting last week with Russia's Vladimir Putin would move towards ending the more than three-year-old war.

Ukraine's 2035 maturity and 2036 maturities, whose payouts are linked to economic performance, lost roughly 3 cents each on Thursday, their biggest daily declines since early April, to bid at 54.3 cents on the dollar, Tradeweb data showed.

Russia said on Wednesday attempts to resolve security issues relating to Ukraine without Moscow's participation were a "road to nowhere", sounding a warning to the West as it scrambles to work out guarantees for Kyiv's future protection.

Jamie Fallon, an economist at Tellimer, said that the losses were a reversal of the earlier optimism over peace talks.

"Moscow demanded veto rights over Western security guarantees and Ukrainian NATO admission," Fallon wrote.

"Russian officials also implied yesterday Putin is unwilling to engage in immediate, direct talks with (Ukrainian President Volodymyr) Zelenskiy as Trump has suggested."