The Eurodollar System primer on the offshore dollar market

Under America’s security pact, the Financial?Giants of the world swiftly took advantage. The major U.S. banks set up branches not just in the U.K. — which grew to become the epicenter of Eurodollar activity — but worldwide. Major foreign banks then set up operations within the U.S., primarily in New York. This, combined with a prolonged period of heightened peace, not only gave rise to the most stable reserve currency on record. Financial behemoths had created the Global Dollar Funding Complex, featuring over 25 different types of Dollar-Denominated Instruments, from FX swaps to Reverse Repos to Commercial Paper.

The global dollar funding complex helped spin intricate webs that provided Dollars to anyone within America’s global security pact, but especially to those outside America’s borders.

Introducing: the Eurodollar system.

The above arbitrage above is one of many varieties of trades occurring in Eurodollar markets daily and reveals what “Eurodollars” have grown to become in the modern era of banking. But what exactly is occurring here? How can entrepreneurs be able to leverage this...

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Disclaimer

This client briefing has been prepared for clients and professional associates of Axe Capital. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide financial advice and should not be treated as a substitute for specific advice concerning individual situations.