Currents flowing in closed loops, arising in a conductor moving in a magnetic field, or in a stationary conductor around which the magnetic field changes. Eddy currents arise due to Faraday’s law of magnetic induction and flow perpendicular to the plane of the magnetic field. They resemble eddies in water, hence their name. They are used in electromagnetic brakes. In thick conductors, e.g., transformer cores, eddy currents can lead to severe heating, so transformer cores are made of a series of insulated plates to limit the magnitude of the eddy currents.
Eddy currents arising in a conductor moving under a stationary magnet. C is the conductor, V is the direction of its motion, B is the magnetic field of the magnet, N is the north pole of the magnet, I is the eddy current. In the part of the conductor that moves away from the centre of the magnet, the magnetic field decreases and eddy currents are moving clockwise, while in the part of the conductor that moves towards the centre of the magnet, the magnetic field increases and eddy currents are formed moving counter clockwise. (Source: Wikipedia.org)