While losses in commodity currencies have been limited amid the recent rout in physical prices and resource-related stocks, investors could be in for a "rude shock," going forward, according to one strategist.
"Deterioration in spot commodity prices and looming inflection in the supply/demand balance, suggest that the terms of trade could plausibly fall a lot further and force central banks in the commodity countries to ease policy and remove the last pillar of support for their currencies," wrote Nicholas Ferres, investment director at Eastspring Investments in a note on Thursday.
Prices of physical commodities such as gold, oil and copper, meantime, have declined between 6 and 11.6 percent over the same period. Major miners including BHP Billiton and Rio Tinto have declined 9 and 11.7 percent, respectively, over the past seven days.
(Read More: Commodity Super Cycle Is Dead: Citi)
Most key resources will move into surplus over the coming quarters, reaching an "inflection point" where supply overwhelms demand, leading to a decline in prices, according to Ferres, who noted that the risk has yet to be priced into the currencies.
For economies such as Australia where booming commodity exports have boosted national income, investment, fiscal spending and employment, this will be detrimental, he noted.
"The Reserve Bank of Australia may be forced to cut rates even further and eliminate the final pillar of support for the Australian dollar. Once underway, the correction could be rapid and impulsive," Ferres said. "The carry monkeys [playing the carry trade] may be in for a rude shock over the coming months."
Comparatively attractive interest rates and superior credit ratings in Australia, New Zealand and Canada have provided support to the currencies. The yield on three-year Australian government bonds, for example, stands at 2.72 percent, compared with 0.34 percent for the three-year U.S. Treasury note.
(Read More: Why the Aussie May Not Escape This Time)
"The sovereign metrics may not look so robust if commodity prices return to pre-boom levels. Brazil and South Africa would be most vulnerable," he added.
Looking further out, Ferres noted that if the U.S. economic recovery gains traction and monetary policy normalizes, this would also reduce the relative attractiveness of commodity currencies.
"This suggests that investors should not enthusiastically chase carry in the commodity currencies," he said.