From Traderpedia

Definition: US Dollars on deposit outside the United States.

Eurodollars are part of the Eurocurrency market where a Eurocurrency is one on deposit outside its country of origin. Thus, Euroyen is Yen on deposit out side of Japan.

[edit] Trading Eurodollars

Eurodollars are traded in the futures market. The leading Eurodollar contract is traded on the Chicago Mercantile Exchange (CME). It is the second largest exchange traded derivative instrument, in terms of contracts traded, in the world. Only the Korean Kospi200 options contract trade more contracts.

A Eurodollar future is defined as (100-r), where r is the interest rate on a US dollar deposit overseas for 90 days, starting at the expiry of the future. CME lists many different expiry dates as long as 10 years out with at least one future per quarter and for shorter maturities one every month. Most of Eurodollar trading is done as time-spreads with two or more contracts.