Ukrainian President's Deputy Chief Of Staff Zhovkva on Wednesday said that Ukraine is a ready for a diplomatic solution, reported Bloomberg. The Russian demand for neutrality can be discussed, Zhovkva said, adding however that there must be security guarantees. Meanwhile, Zhovkva said that Ukraine is not willing to trade a "single inch" of its territory and Ukraine is looking for a clear response from the EU on its membership application. 

Market Reaction

The dollar and other safe-haven currencies like the yen have been underperforming in recent trade amid the more positive commentary from Ukraine and, prior to that, Russia on the possibilities for a deal. EUR/USD lept towards 1.1050 from previously closer to 1.10 and is now up more than 1.2% on the day, while GBP/USD jumped back above 1.3150 and is roughly 0.5% up on the day.

The more positive-sounding commentary has seen oil prices come under pressure in recent trade and other commodities also pull back. While Ukraine and Russia have both sounded more amicable towards a deal on Wednesday, Ukraine's statement that it won't give up a "single inch" of its territory is at odds for Russian demands for Crimea and the recognition of L/DPR independence. That suggests it will remain difficult for a compromise to be found.