By Swati Pandey
SYDNEY, May 25(Reuters) - The Australian and New Zealand dollars stepped back on Friday as risk appetite soured after U.S. President Donald Trump scrapped a key summit with North Korea, although Pyongyang's measured response to the cancellation helped calm nerves.
The Australian dollar AUD=D4 , widely seen as a liquid proxy for risk trades, was last down 0.2 percent at $0.7563 as it drifted away from a recent one-month top of $0.7606.
The Aussie is still up 0.7 percent for the week so far.
The New Zealand dollar NZD=D4 eased 0.1 percent to $0.6923 from a one-week high of $0.6974 set on Tuesday. For the week, the kiwi is almost flat after five consecutive weekly losses.
The Aussie and kiwi got a small lift this week as the greenback faltered after minutes of the U.S. Federal Reserve's last meeting were seen as dovish. antipodean currencies have been under pressure from diverging monetary policies with the central banks in Australia and New Zealand taking a consistent stance that rates will remain at record lows even while the U.S. Federal Reserve has been on a tightening path.
"For the moment, the dominant themes in developed market forex is the mild dovish tilt, or at least the perception of same, of the FOMC and the market's reaction to the cancellation of the US-North Korea summit," said Greg Mckenna, Sydney-based chief strategist at AxiTrader.
On Thursday, Trump wrote a letter to North Korean leader Kim Jong Un to announce his withdrawal from what would have been the first-ever meeting between a serving U.S. president and a North Korean leader in Singapore on June 12. announcement came after repeated threats by North Korea to pull out of the summit over what it saw as confrontational remarks by U.S. officials.
North Korean Vice Foreign Minister Kim Kye Gwan said Pyongyang still hoped for a "Trump formula" to resolve the standoff over its nuclear weapons programme, noting that North Korea was open to resolving issues with the United States.
Next week, Australia releases building approvals data for April and business investment data for the first quarter.
Australian government bond futures gained, with the three-year bond contract YTTc1 adding 1.5 ticks to 97.80. The 10-year contract YTCc1 rose 2 ticks to 97.2050. (Editing by Shri Navaratnam)