Competing for Eurodollar trading is the fastest-growing futures contract in Chicago Mercantile Exchange history, "Secured Overnight Financing Rate ("SOFR") futures. They debuted a year ago. They are often spread against the Federal Reserve 30-Day Federal Funds futures, or against Eurodollar futures, changing hands at the rate of 28,000 contracts a day ($7775,000 in terms of one basis point of SOFR exposure.)

Libor transactions have dwindled but they are the basis for an interbank lending market. The Libor Index is considered increasingly unreliable. U.S. Dollars and the SOFR Index have been suggested as replacements for the Libor rates.

SONIA (based on the British Pound) and EONIA (based upon the Euro) are considered a better overnight reference rate, used in swaps, where a fixed rate is swapped against a pre-determined published index of a daily overnight reference rate.

A "leverage ratio" requirement in the U.S. requires banks to hold capital equal to balance sheet assets at a minimum level of 4% in the U.S. In order to be well-capitalized, banks must achieve a 5% minimum leverage ratio is having a negative effect on Eurodollar trading.

Forbidding international tensions are impacting Eurodollar trading, including the bombing of 33 Tuirkish soldiers in Syria by Russia in the Middle East.

Sometimes the Euro vs. the U.S. Dollar is referred to as the "Eurodollar pair." The Euro has not necessarily remained weak and while some suggest it will reach parity with the U.S. Dollar before, others suggest a flight to safety may favor both the Euro and the Swiss Franc.

Latest developments in the sturggle internationally against the virus have resulted in extreme market volatility or "panic mode" and selloffs. The European Central Bank appears to be unable to generate enough stimulus to trigger inflation and make the Euro more attractive for carry traders. A zero interest rate Euro is simply not attractive to traders except as a carry item.

The German economy, formerly strongest in the Euro Zone, is showing signs oif slowing down. Germany is playing catch-up to China and U.S. in technological developments for electric vehicles and autonomous driving. This can spell pain for the Euro going forward and iompact Eurodollar trading negatively.

Trump's tariffs are helping to weaken the European economy, resulting in reduced demand for Eurodollars.

As China tightens its grip on Hong Kong, Hong Kong will lose much of its appeal to foreign investors as a financial hub. The Hong Kong Dollar is pegged to the U.S. Dollar meaning it trades with a very narrow spread between the two currencies. HSBC Bank (Hong Kong and Shanghai Bank) has supported mainland China's policies toward Hong Kong. This is allowing HSBC to be an under-performer in markets, and affects Eurodollar trading. That does not mean lack of interest, for the former dull futures market has been very active coming to life. However, investor interest in haviong Eurodollars seems to be cooling.

We ssee overall news as generally negative for Eurodollars.

The "LIBOR" rate is the London Inter-Bank Overnight Rate. It is similar to the Federal Funds rate and usually tracks it closely, but may offer a better interest rate on deposits. American banks can use overseas deposits to credit the necessary capitalization requirements by law in the U.S. Eurdollars have interest rates close to an index, the "LIBOR", while T-Bills are similar short-term contracts based upon the Fed Funds rates. In times of crisis, spreads between interest on Eurodollars and U.S. bank interest rates, with whichever area (domestic or overseas) having the worst crisis apt to have interest rates increase.