Eurocurrency Market
The eurocurrency market is the money market for currency outside of the country where it is legal tender. The eurocurrency market is utilized by banks, multinational corporations, mutual funds, and hedge funds. They wish to circumvent regulatory requirements, tax laws, and interest rate caps often present in domestic banking, particularly in the United States.The term eurocurrency is a generalization of eurodollar and should not be confused with the EU currency, the euro. The eurocurrency market functions in many financial centers around the world, not just Europe.
Eurocurrency Market
Definition
The Eurocurrency market refers to the money market for currencies held outside their country of origin. It is utilized by banks, multinational corporations, mutual funds, and hedge funds seeking to avoid domestic banking regulations, tax laws, and interest rate caps. It is important to note that Eurocurrency is a broader term that includes Eurodollars and should not be confused with the European Union's currency, the Euro.
Origin
The Eurocurrency market originated in the 1950s when the Soviet Union, to avoid U.S. financial sanctions, transferred its dollar deposits to European banks. These deposits were called
