Luke Charles S620_ Rivera#96

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What is eurodollar market and why is it important in forex?

The eurodollar market refers to U.S. dollars held in banks outside the United States, especially in Europe. Emerging in the 1950s, eurodollars provided offshore funding free from U.S. regulation. Today, eurodollar futures remain key benchmarks for global interest rates. For forex, eurodollars influence USD liquidity and global borrowing costs. Institutions watch eurodollar futures to gauge expectations for Fed policy. Retail traders can track eurodollar spreads as proxies for global dollar demand. Benefits: deep, liquid market shaping USD trends. Risks: offshore vulnerabilities during crises. The eurodollar system illustrates how USD power extends beyond U.S. borders.