Credit Agricole CIB Research previews next week's ECB June policy meeting.

"In the near term, EUR investors will focus on the outcome of the ECB meeting. With a 25bp rate hike almost fully priced in at the time of writing, key for the EUR outlook would be the bank’s updated forward guidance. The ECB should maintain its data-dependent policy approach while its updated forecasts could point at intensifying downside risks to growth and a lack of broad-based second-round inflation effects," CACIB notes.

"A ‘dovish hike’ by the ECB would thus do little to boost the EUR rate appeal and leave it vulnerable amid persistent geopolitical risks," CACIB adds.