The New Zealand Dollar experienced mixed movement after the RBNZ voted to leave interest rates at a record low of 1.75 per cent at its latest policy meeting.
While the outcome of the vote had been widely forecast ahead of the decision, the New Zealand Dollar still tumbled as policymakers indicated that rates would likely remain on hold for the foreseeable future.
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The neutral outlook from the bank comes amidst the uncertainty surrounding the new New Zealand Labour government, leading policymakers to strike an increasingly dovish tone in their accompanying statement.
The statement read: "The Bank has incorporated preliminary estimates of the impact of new government policies in four areas: new government spending, the KiwiBuild programme, tighter visa requirements and increases in the minimum wage, however the impact of these policies remains very uncertain."
However, despite some gains this morning, Sterling still remains under pressure following the resignation of UK International Development Secretary Priti Patel yesterday.
Patel's resignation comes just days after Sir Michael Fallon quit as Defence Secretary, with the loss of two cabinet members within a week being a significant blow to Theresa May's credibility.
The constant reshuffling of her cabinet is doing little to inspire confidence in the Prime Minister's leadership, especially amid the uncertainty of Brexit, with some observers also worrying that any further scandals at the top of the conservative party could threaten the party's narrow majority in parliament.
Looking ahead, the GBP/NZD exchange rate could see some further movement later today as Brexit negotiations get back underway with the sixth round of talks.
Investors are hoping that both sides will be entering the talks with a renewed sense of purpose after leaders from both sides suggested they wished to see negotiations accelerate, with any hint that discussions are moving forward in a timely manner likely to strengthen the pound.
Meanwhile a lull in domestic data until late next week may leave the New Zealand Dollar a little exposed over the coming days, possibly paving the way for a more significant recovery for Sterling.