The New Zealand dollar soared after investors expected the U.S. dollar to move far too fast following the positive U.S. jobs figures last week.

The Kiwi dollar increased to 78.01 U.S. cents from closing at 77.26 cents in Wellington last July 8. The U.S. dollar index receded overnight after soaring to its three-year high following upbeat employment numbers last July 5.

For the first time, U.S. Treasuries have surged in three days following speculation of increase in 10-year yields. Client advisor at Bancorp Treasury Peter Cavanaugh said it's still all about the greenback and not the New Zealand dollar.

Cavanaugh said the job numbers gave investors some kind of sugar high. By taking a look at what happened with the U.S. dollar and U.S. Treasuries, investors may have went too far with their reactions. It may be time to consolidate, he said.

Market traders today will monitor the Quarterly Survey of Business Opinion by the New Zealand Institute of Economic Research for any sign of business sentiment for the second quarter.

Business sentiment

According to Cavanaugh, business expectations are said to be positive as the New Zealand economy benefits from the Christchurch earthquake damage and strong growth in the dairy industry.

The Statistics department in New Zealand has released data on electronic card transactions for June. The report provides valuable insight in consumer spending. The said index has seen only one slump in the past eight months.

Median sales price of houses in New Zealand rose to 0.5 per cent in June based on Real Estate Institute Figures.

Australian traders will be looking out for business confidence reports for any sign of weakness in the economy. The New Zealand dollar has increased to 85.48 Australian cents from yesterday's 85.39 cents.

News of China's commodity prices and inflation are also closely watched for signs of weakness affecting Asia's largest economy. With Australia as the first, China is the second biggest trading partner of New Zealand.

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