Eddy currents are loops of electrical current induced within conductors (any conductive material) by a changing magnetic field in the conductor's vicinity according to Faraday's law of induction. Eddy currents flow in closed loops within conductors, in planes perpendicular to the magnetic field.
They are induced by changing magnetic fields. They can be created when a conductor is moving through a magnetic field, or when the magnetic field surrounding a stationary conductor is varying i.e. anything which results in the conductor experiencing a change in the intensity or direction of a magnetic field can produce eddy currents.
The size/intensity of the eddy current is proportional to the change of the magnetic field's intensity in certain directions, the area of the loop and the rate of change of magnetic flux, and it is inversely proportional to the resistivity of the conductor.
Examples include electromagnetic braking, metal detectors, aluminium can separation non-destructive testing, identification of metals , proximity and displacement sensors, detection of coins in vending machines, and also for measurements of coating thickness.