NZD/USD strengthens above 0.5800 amid US government shutdown fears

• NZD/USD gains ground near 0.5820 in Thursday's early Asian session.
• US private sector payrolls dropped by 32,000 in September, weaker than expected. 
• The prospect of further rate cuts by the RBNZ this year might cap the pair's upside. 

The NZD/USD pair trades in positive territory for the second consecutive day around 0.5820 during the early Asian session on Thursday. The US Dollar (USD) softens against the New Zealand Dollar (NZD) as the US government shut down after US President Donald Trump and Congress failed to reach a deal. The US weekly Initial Jobless Claims will not be published in light of the ongoing federal shutdown. 

The federal government shut down on Wednesday after a deadlocked Congress failed to reach a funding deal.  The September US Nonfarm Payrolls (NFP) report will not be released on Friday, as the Labor Department has paused virtually all activity. "We are concerned with the government shutdown, which also does not bode well for the buck," said Juan Perez, director of trading at Monex USA in Washington.

The private-sector jobs in the United States contracted last month, boosting expectations that the Federal Reserve (Fed) will cut interest rates two more times this year. This, in turn, could also weigh on the Greenback and create a tailwind for the pair. 

US private sector payrolls declined 32,000 in September and annual pay was up 4.5% on a yearly basis, the Automatic Data Processing (ADP) showed Wednesday. This figure followed the 3,000 decrease (revised from a 54,000 increase) reported in August and came in below the market expectation of 50,000.

On the other hand, the dovish stance by the Reserve Bank of New Zealand (RBNZ) might undermine the Kiwi against the USD. The RBNZ's forecasts suggested additional rate reductions, potentially with two more 25 basis points (bps) easing by March next year. Nonetheless, the exact timing and extent of these future cuts will depend on the pace of the economic recovery.