U.S CAPITAL FOREX TRADING ACADEMY

The Euro market

A major catalyst to the acceleration of Forex trading was the rapid development of the Eurodollar market; where US dollars are deposited in banks outside the US. Similarly,Euro markets are those where assets are deposited outside the currency of origin. The Eurodollar market first came into being in the 1950's when Russia’s oil revenue - all in dollars - was deposited outside the US in fear of being frozen by US regulators. Thatgave rise to a vast offshore pool of dollars outside the control of US authorities. The US government imposed laws to restrict dollar lending to foreigners. Euro markets were particularly attractive because they had far less regulations and offered higher yields.From the late 1980's onward, US companies began to borrow offshore, finding Euro markets a beneficial center for holding excess liquidity, providing short-term loans and financing imports and exports.

London was, and remains the principal offshore market. In the 1980's, it became the key center in the Eurodollar market when British banks began lending dollars as an alternativeto pounds in order to maintain their leading position in global finance. London’s convenient geographical location(operating during Asian and American markets) is also instrumental in preserving its dominance in the Euro market. 

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