eurodllars are basically the dollar denominated deposits  
which are outside the US or in foreign branches of american 
banks.these are the dollars which escape the regulation of 
federal reserve.initially these dollar denominated deposits 
were in europe and hence wre known as eurodollars, nowdays 
theses eurodolars are also in some other countries and but 
mainly are known as eurodollars.as these are escape the 
federal reserve so banks can trade on them with narrower 
margin.