Euro area Economic Sentiment Indicator drops to 99 in July vs. 102 expected

• Economic sentiment continued to weaken in the euro area. 
• EUR/USD lost its traction, turned flat on the day near 1.0200.

"In July 2022, the Economic Sentiment Indicator (ESI) plummeted in both the EU (-4.2 points to 97.6) and the euro area (-4.5 points to 99.0), falling below its long-term average," the European Commission reported on Thursday. 

Further details of the publication revealed the Industrial Confidence Index dropped to 3.5 in July from 7 in June and the Services Confidence Index declined to 10.7 from 14.1. Finally, the Consumer Confidence Index fell to 27 from 23.8, matching the market expectation.

Market reaction

The EUR/USD pair edged lower with the initial reaction to the disappointing sentiment data and was last seen trading flat on the day near 1.0200.