Euro Feds

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DEFINITION

A federal wire transmission advancing funds in Eurodollars from a U.S. bank with excess funds to another with insufficient reserves. Euro Feds settling in London clear through the clearingshouse interbank payments system (CHIPS) whereas transactions taking place in New York go through the Fedwire.

INVESTOPEDIA EXPLAINS

In some instances it may be more attractive for a U.S. bank to borrow or place funds in the Euro market rather than buying or selling Federal funds. However rates on both Fed funds and overnight Eurodollars are closely related.


RELATED TERMS
  1. Federal Funds Rate

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  2. Eurocurrency

    Currency deposited by national governments or corporations in banks outside ...
  3. Eurodollar

    U.S.-dollar denominated deposits at foreign banks or foreign branches of American ...
  4. Federal Funds

    Excess reserves that commercial banks deposit at regional Federal Reserve banks. ...
  5. Reserve Requirements

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  6. Euro Deposit

    The equivalent of a money market rate on cash deposits made in the euro currency. ...
  7. Fedwire

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  8. Currency Union

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