FXstreet.com (Barcelona) - A slightly more hawkish Fed minutes, where some members considered to soon start tapping bond purchases, came as a surprise by market participants, leading to a vigorous rise in all things USD.

Sebastien Galy, currency strategist at Societe Generale, notes: "In such a phase, the market is typically badly positioned structurally and unwilling to hear the news. The reaction has been most severe on the liquidity fuelled equities and the short USD position. We have been talking for a while about the degree of instability in FX and it is increasingly showing."

This instability, as Sebastien notes, "is hitting equities but not yet the core EM/USD in full force, with the odds being that the EM/USD position will have an unhappy day." Societe Generale continues to support its short calls on GBP, EUR, CHF, CAD, AUD, JPY and long USD. On the Pound outlook, Mr. Galy suspects that after the new multi-year lows, "1.50 is the next likely target."