The New Zealand dollar falls against the currencies of the United Kingdom and the United States.

The New Zealand dollar has fallen to a seven-year low against sterling and a six-month low against the US currency amid a global economic downturn.

BNZ market strategist Jason Wong said the New Zealand dollar is likely to remain under pressure given the current strength of the US dollar, while the weakness of China’s economy has pushed commodity prices to lows of three years.

“China’s data has disappointed on the downside, so their economy is really struggling and that is fueling a lower commodity price environment,” Wong said.

“We have a national economy facing recession-like conditions, and a Reserve Bank that feels it has worked enough on (interest) rates.

“Put all those factors together, there are a lot of headwinds New Zealand is facing at the moment.”

Wong said the kiwi dollar is likely to remain under pressure as long as the US economy remains strong, with the US Federal Reserve signaling the possibility of further interest rate hikes, which are currently in its highest level in more than two decades.

While a low New Zealand dollar exchange rate generally benefited exporters, Wong said any gains were expected to be more than offset by weak commodity prices.

“At the same time, inflationary pressure is probably building, which is certainly not something the economy needs right now.”

The New Zealand dollar was trading at 59.6 US cents, 92.2 Australian cents and 46.9 British pence in early local trading on Wednesday.