Foreign travel made easier with prepaid cards

Imagine being stranded in a foreign land without enough cash on a holiday or business trip.

As per the Reserve Bank of India guidelines, a tourist can carry foreign exchange up to $10,000 per fiscal, of which only $3,000 can be carried in the form of foreign currency notes and coins.

For the rest, one has to resort to traveller’s cheques or banker’s draft. What if the cheque or draft was misplaced or stolen, or got stuck in baggage that was delayed?

Enter banks such as Axis, ICICI, HDFC and travel agencies such as Thomas Cook, Akbar TravelOnline.com, Cox & Kings and SOTC with prepaid travel cards, meant exclusively for tourists going abroad or vice versa.

Prepaid travel cards are available in different currencies and can be bought even on the day of travel. The exchange rate for a particular currency is based on what is prevalent on the day the card is loaded.

Though one can get multiple travel cards for different currencies, only one card will be issued for a single currency. One can load up to $7,000 on such cards and carry up to $3,000 in notes and coins.

“We are proud to have introduced this unique payment solution for foreign nationals and NRIs visiting India,” said P Mukherjee, president - treasury and international banking, Axis bank.

Mahesh Iyer, vice-president - foreign exchange, Thomas Cook India, said, “We launched our Smart Forex Prepaid Card in 2009, which is useful to travellers, as any misuse of this card doesn’t give access to the person’s entire bank account, unlike a debit card. And, if the card is lost, we can issue a fresh pin number immediately.”

There are three types of prepaid cards —- closed-ended, semi-closed and open-ended.

-Closed-ended prepaid cards are used for payments meant for a single purpose. For example, the card will be issued to the holder to make payments towards DTH TV bills.

-Semi-closed prepaid cards are available in physical and virtual forms. A physical card is like a normal debit or credit card and has an account number and password.

A virtual card only has an account number and password and can be used for online payments.

-Open-ended cards combine foreign exchange, travel and gift cards. These cards are issued by banks, travelling agencies and are accepted by all current point of sale (POS) terminals.

The advantages of these cards are many:
Safe and secure: If the card is lost/misused, one can block the card immediately. Banks such as ICICI offer two cards —- an active card and a deactivated card. If the active card is lost, youcan call the bank, activate the second card and use it to withdraw the entire amount.

Protection against fraud: Prepaid cards are less prone to fraud as they have a high level security against magnetic strip cards. These cards use advanced technology with an embedded chip to store all confidential information.

Easy reload: Prepaid cards can be reloaded easily when the money is exhausted when you are travelling. If it is a corporate card, the company takes care of the formalities for the card to be reloaded. If it is a personal card, one can ask a family member to reload the card, provided the legal formalities have been taken care of before travel. “If a traveller exhausts the amount on a card, we can help the person reload the card within two hours,” said Iyer of Thomas Cook.

Economical: Usually, all debit and credit cards charge a mark-up percentage plus service tax on any type of cross currency transaction that is made from a foreign country. The mark-up charge is as high as 3.5% with additional service tax of roughly 0.4%.

So one ends up paying close to 3.9% on every transaction made through a card. This includes transactions such as making payments or cash withdrawals. Additionally, one has to pay according to the foreign exchange rate prevailing on that day.

“A prepaid card is convenient as one doesn’t have to pay any mark-up charges on some transactions unlike a debit or credit card,” said Vijay Kesavan, CEO of Akbar TravelsOnline.com.

“Prepaid cards usually charge extra only on ATM cash withdrawals. The charges vary depending on the bank or travel agency,” said Iyer of Thomas Cook.

Better than traveller’s cheques: Prepaid cards have an edge over traveller’s checks as well. Traveller’s cheques have to be exchanged for a required currency before they can be used for a financial transaction and very often can be exchanged only during banking hours.

“If you want money urgently and you visit a money changer after banking hours, it is possible they may charge you a 1-1.5% over and above your normal transaction,” said an ICICI Bank official, requesting anonymity.

Moreover, to exchange traveller’s checks, one has to show documents for identification. And since these checks have to be exchanged against the local currency of a country, they are not accepted at any POS terminals unlike prepaid cards.

Protection against fluctuating exchange rates: Prepaid cards carry the exchange rate that was prevalent on the day the card was loaded. Hence, it offers protection against fluctuating exchange rates while making purchases
soucer:http://www.dnaindia.com/money/report_foreign-travel-made-easier-with-prepaid-cards_1509357

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WORLD FOREX: Euro Pares Gains Made After Hawkish ECB Comments

TOKYO (Dow Jones)--The euro fell slightly against the dollar in Asian trading Friday, trimming sharp gains made Thursday after hawkish comments from the European Central Bank, as some traders took profits on the view that the ECB won't embark on a sustained series of tightening measures to head off inflation pressures.

Profit-taking interest for the euro stayed intact at $1.3980 and above, while a growing view that the ECB will raise its key interest rate as early as in April has given a firm floor to the single currency.

At a news conference on Thursday after the ECB left its key interest rates unchanged, ECB President Jean-Claude Trichet vowed "strong vigilance" on inflation and said a rate hike next month is "not certain but possible." But he added that such a move wouldn't be "the start of a series of rate-hike increases."

"It has became clear that the ECB will shift away from its easy monetary policy faster than its U.S. counterpart," said Yoshio Yoshida, a trader at Mizuho Trust and Banking in Tokyo. "But I am not sure about how fast the ECB will tighten its credit in a row".

"It would take time for the U.S. Federal Reserve to end its present quantitative credit easing as it needs to examine a series of economic indicators until June," he added.

Daisuke Uno, chief strategist at Sumitomo Mitsui Bank said "the market was caught off guard," about the possibility of a rate increase in April, which has lifted the pair's resistance to 1.4300 from around 1.3800 before Trichet's comments. Uno said that whether the ECB will keep tightening credit could largely depend on the sustainability of the global economy and oil price movements.

At 0450 GMT, the euro was $1.3955 against $1.3967 late Thursday in New York, according to EBS via CQG. The dollar was at Y82.34 from Y82.44, while the euro was Y114.91 from Y115.07.

The dollar was trapped in a tight range against the yen, with the upside capped at Y82.50 due to selling interest from Japanese exporters ahead of their fiscal book-closing at the end of March, while the downside was solid at Y82.00, traders said.

Trade will likely be thin ahead of U.S. jobs data due out at 1330 GMT. Non-farm payrolls are expected to increase 200,000 in February from a month earlier after a gain of 36,000 in January, according to the median forecast of economist surveyed by Dow Jones Newswires. The unemployment rate is seen at 9.1%, compared with 9.0% in the previous month.

Uno said the downside risk for the dollar against the yen lurks after the release of the U.S. jobs data, since the market has been overly optimistic about the direction of the U.S. economy.

The ICE Dollar Index, which tracks the U.S. dollar against a trade-weighted basket of currencies, was at 76.671 from 76.463.

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Mangalore Chem.: Nutrition doesn't reach profit level

Such forex gains or losses are extraordinary in nature, in the sense that the outcome cannot be predicted, and have no real bearing on the operating efficiency of the unit. What is more, in the preceding year the company also sold/provided for diminution in value of its fertilizer bonds and took another whack of Rs 356 m, against a write off on this count of Rs 43 m in the latter year. The book value of the bonds is shown as Rs 1.5 bn in the preceding year end, and booking a loss of Rs 400 m on this book value is not small change. (In the process however the company reduced debt at year end to Rs 982 m from Rs 4 bn in the preceding year.) This is another extraordinary item in the sense that it is not of a recurring nature. In other words taking into account both these debits, the company was out of pocket to the tune of Rs 1.1 bn in FY09. The company also separately books losses on assets sold or discarded (the assets are apparently of vintage value), but then, this is a separate issue.

If these extraordinary costs/ gains on account of forex and sales of fertilizer bonds are neutered from the expense side of the P&L account for either year, then one will end up with the ridiculous situation of the company actually recording a substantially higher pre-tax profit of Rs 1.5 bn in FY09, against a pretax profit of Rs 571 m in FY10. This is absurd. On the one hand we have the management crowing about record production, record volume sales, and record profits etc, and add to this the large imports of finished stocks for resale, and the company actually makes less money in the bargain. This is a no brainer. (Granted that managements perforce have to present the sunny side of an enterprise, but that does not mean going overboard in the process.)

Complex accounting exercise

Even the accounting for its expenses etc appears to be a complex exercise. One schedule says that the CIF (Cost, Insurance and Freight) value of its raw material imports is Rs 3.9 bn, while another schedule says the value of imported raw materials is Rs 9.1 bn. How can there such a big difference in the two figures. (For the preceding year the figures are Rs 8.1 bn and Rs 13.3 bn.) There appears to be some mismatch in the finished goods import schedules too. And, from the cash flow that it has generated, the management has been kind enough to spend a little over Rs 1 bn in the last two years in replenishing the gross block. It has however not led to any visible increase in its operational efficiencies for sure.

Since it is de-rigueur for corporate houses to boast a few subsidiaries, MCF too has an offshoot sporting the name, MCF International, with a paid up capital base of Rs 500,000. Not surprisingly it is making heavy weather. From the sketchy details that the company has provided, this sibling has made a loss before taxation of Rs 28 m on a turnover of Rs 121 m in FY10. The after tax loss is slightly more lustrous at Rs 29 m. The quantum of its negative net worth is however not stated. And it had total liabilities of Rs 25 m. The latter figure is a bit puzzling because as per the parent's annual report, the total outstanding at year end from the sibling, being loans advanced to it, was Rs 79 m (Rs 12 m). This loan element does not appear to feature as a liability in the minimal details of the accounts furnished by the sibling.

All in all it is another insipid performance.

I DO NOT HOLD ANY SHARES IN THIS COMPANY, EITHER DIRECTLY, OR UNDER NON DISCRETIONARY PORTFOLIO

This column "Cool Hand Luke" is written by Luke Verghese. Luke has been a business journalist, financial analyst and knowledge management head with a professional experience of more than 20 years. An avid watcher of the stock market, he has written extensively on stock market trends. His articles have featured in Business Standard, Financial Express and Fortune India amongst others. He has also been the Deputy Editor, Fortune India and the Financial Editor of The Business and Political Observer.

Disclaimer:
The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the
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Foreign exchange market

f you’re reading these lines, we’re 99 percent positive you would like to become a trader as others don’t come by here (one percent is what we leave for professional internet surfers). The Masterforex-V Trading Academy is pleased to share the secrets of this fascinating and, at the same time, challenging occupation. The Academy has helped thousands of traders to master the basics and become true aces over the five+ years it has been open.

We’re 100% confident you are attracted by the prospects of getting rich fast in the forex. Why not! The daily turnover in the global forex market is 4 billion dollars! Can you, so clever, educated, capable, easily trained, really fail to put your little finger in at least a millionth of this pie? This $4 grand a day will be enough for things other than just a slice of bread under red caviar. You have already red dozens of promo article saying that it’s easy and fast to learn making money in the forex. Stories of lucky forex traders are impressive and make you want to take up currency speculation.

Popular wisdom says that even the improbable happens from time to time. There’s always one lucky trade that can make you a killing among millions of trades made every minute in the forex market. This doesn’t mean at all that everyone’s lucky. Forex is a market. The idea of a market implies inevitable risk. Unfortunately, 95-97% of beginner forex traders get ruined within a couple of days or even hours. Losses aren’t big – a few hundred dollars, but this failure turns a person away from forex trading for good.

Who do you think is primarily exposed to failure - the unlucky or the uneducated? This question seems rhetorical. Don’t believe promises that after a few weeks or months of training you’ll become a true (and lucky!) participant of the forex market. Otherwise, the entire world would be sitting in front of the computer and making millions on currency price differentials.

The Masterforex-V Trading Academy trains forex market specialists stage by stage. After the Academy’s students master the first level of knowledge and gain some practical skills of currency trading, they can move on to the fist independent transactions in the forex market. To improve their qualifications, students continue training in the Academy at a higher level – and keep on for a couple of years. Such a cyclical method of training is attractive is the way that our students can enter the real forex market as early as after the first stage of learning and, at the same time, hone their skills and make more substantial progress in the forex.

You can start learning the basics of forex trading in the free school of forex training for beginner traders within the Masterforex-V Academy.

The first thing we teach our students is Money Management (MM). Forex trading is about making money. But you can make money only if you have capital. Losing it is very easy – one single losing large trade after a whole series of winning transactions can leave you with an empty pocket. What do you have left to continue work in the forex? The forex trader’s golden rule: avoiding losses is better than making profits.
Articles for professional participants of financial markets dedicated to money management rules were published in previous issues of Market Leader: “Unknown Aspects of Money Management From Professional Traders”.


Managing money requires more skill than making money.
Popular forex wisdom

Traders work in the forex market using trading systems (TS). A lot of TS were created during the 30+ year history of the forex market. Each has its followers and opponents. However, the trading system should be treated by the forex trader as a tactics for carrying out currency trading, while money management is the strategy.

Any tactics used without a strategy makes defeat inevitable. At the same time, based on one and the same strategy you can use a variety of tactical action depending on the situation in the battlefield – pardon the slip of the tongue: of course, the market. Even though the market is a true battlefield.

Working in the forex market takes a long time. We already said that only a few lucky ones manage to win the jackpot and completely retire packed with money. The trader will work in the forex for years making profits and suffering inevitable losses. Whether their effort is successful is defined by the final balance for a certain period: do profits exceed losses or not? The forex trader is like a chicken in that it pecks grains one by one rather than drag a bagful of it. Money management makes sure that profits will eventually exceed losses.

Having a chicken tomorrow is better than an egg today.
Popular forex wisdom

Alexander Elder, a professional trader and author of the bestselling Trading for Living that has been translated into 9 languages, has defined three levels for mastering the skill of money management.

In the first stage, money management defines whether beginner traders survive in the forex market. A strict compliance with fundamental ideas of money management is an issue of survival in the forex market. “Reckless amateurs take a mad risk making commissions for brokers and profits for traders on the floor. When they are washed out of the market, new milksops come as hope never dies”, - this is A. Elder’s tough assessment of people who ignore money management.

On the second stage money management creates and supports a stable income.

The third stage involves already super incomes.

Beginner traders are trained by the Masterforex-V Academy in money management fundamentals – firstly, how to protect their startup capital. Students learn to prepare to trading, define risks, tools for risk regulation, trade maintenance criteria. They learn to survive in the forex market. The beginner’s top priority task is not to get profits, but to avoid losses. It’s like two plus two: when you lose 50% of your initial capital you’ll need to get 100% on your subsequent trades to come breakeven. Notably, less than one percent of forex traders in the world can make 100%, i.e. double their capital. These are true pros that have been honing their skills for years.

Capital needs understanding rather than information.
Popular forex wisdom

Main money management principles aren’t complex but serve as an effective tool for risk control. When defined exactly, the risk allows selecting the right lot size and stop-loss level. Our students learn during their first lectures that money management is based on mathematics, and mathematics is an exact science.

Only after they learn the basics of money management the students of the free school of forex training for beginner traders within the Masterforex-V Academy will move on to first practical operations in simulated accounts.
soucer:http://www.profi-forex.us/news/entry4000000940.html

FOREX-Dollar firm in Asia; Aussie eyes cenbank testimony

Dollar keeps bid tone in Asia after overnight gains

* Renewed euro zone jitters weigh on euro

* Upbeat U.S. data further shores up dollar

SYDNEY, Feb 11 (Reuters) - The U.S. dollar drifted higher early in Asia on Friday, having made solid gains overnight as renewed jitters about the euro zone debt crisis weighed on the common currency.

U.S. data showing new applications for unemployment benefits dropped to a 2-1/2 year low last week also helped shore up the greenback, which held near one-mont highs against the yen.

"Any easy gains in the EUR are susceptible to rapid reversal," said David Watt, senior currency strategist at RBC Dominion Securities.

"Overnight EU peripheral jitters reemerged ... EUR reacted as one might expect, it sold off from just over $1.37 to a low of $1.3577."

The euro last traded at $1.3600 . Support is seen at around $1.3483, a level representing the 38.2 percent retracement of the Jan. to Feb. rally.

Traders said the European Central Bank stepped in to buy Portuguese bonds after yields on the country's debt hit euro-era highs on a perceived lack of progress towards resolving the block's year-long debt crisis.

The dollar index , which tracks the greenback's performance against a basket of major currencies, was last at 78.189, near a one-week high around 78.336 set overnight.

Against the yen, the dollar reached a high around 83.37 yen before last trading at 83.20 yen.

Meanwhile the Australian dollar hovered at 1-1/2 week lows after suffering a steep decline on Thursday in the wake of the jobs data.

The Aussie fell to a low of $1.0010, before recovering slightly to $1.0044.

All eyes are on Reserve Bank of Austrlaia head Glenn Stevens' semi-annual testimony to the House of Economics Committee.
soucer:http://www.reuters.com/article/2011/02/10/markets-forex-idUSL3E7DA2MU20110210

Will the UK unemployment rate surprise the market?

Last week the Bank of England decided to keep the country's interest rates unchanged at 0.5%. Focus now turns to December's unemployment rate and the Quarterly Inflation Report due on Wednesday February 16 at 9:30 and 10:30 GMT respectively.
The BoE continues to follow a loose monetary policy in an effort to boost an economy deeply hurt by recession. The country's sluggish growth was made more evident after fourth quarter Gross Domestic Product (GDP) shocked the markets by showing a disappointing 0.5% contraction of the economy while economic analysts argued for a 0.5% expansion.
Unemployment in the UK is the weakest link in the UK's recovery path. Since the global financial crisis began, a record high number of people lost their jobs or could not find a job and, as a result, the country's unemployment rate rocketed to 7.9%. Why does the labor sector attract so much attention? The reason is that the labor market reveals a healthy or problematic economy. The high unemployment in the UK is the product of the sluggish growth that burdens the country since it entered recession. The situation does not seem to improve especially after the government's austerity measures and this year's VAT hike.
It seems that BoE's move to keep the country's interest rates at low levels was a simple decision to make. Slow growth indicates for lower interest rates.  Not so fast though. Unemployment is not the only serious issue that the UK is facing. The economy also suffers from a rising inflation. Consumer Price Index (CPI) revealed that the country's inflation rose as high as 3.7% while the central bank's target is only at 2%. An escalating inflation can hurt consumer spending and, in turn, can further cause a contraction of the economy. It is a very worrying economic situation for the UK as it is forced to deal with a slow growth as well as rising price levels. The central bank's main tool to fight inflation is by increasing the interest rates. But such move is not wise in a time while economy battles to heal from the crisis. Thursday's unemployment rate and Inflation Report will provide the market with a clearer insight about the economy and interest rates.
Will the unemployment rate surprise the currency market and decline below a stubbornly high level? If this occurs then strength will be added on the view that the UK is recovering. This will, in turn, raise expectations of a rate hike in the next interest rate meeting, which may boost the sterling. The Quarterly Inflation Report is also expected to have a large impact on the market. Speculators expect a hawkish Inflation Report which will cause extreme volatility in the currency market. Usually better than expected figures cause the currency to rise and vice versa. Whatever the outcome, it is certain that it will be an interesting day to trade!! 
Please note that Forex trading (OTC Trading) involves substantial risk of loss, and may not be suitable for everyone. This report is provided by Easy-Forex® for informative purposes only. In no way it is a recommendation by Easy-Forex® for you to engage in any trade. It is your sole responsibility and you will have no claims with regards to this report against Easy-Forex®. If you do not agree to this, you are strongly advised not to use this report. Hence, Easy-Forex® shall not be held responsible for any outcome of trading decisions, in regards with this report or similar reports.
soucer:http://www.easy-forex.com/news/special-reports/will-the-uk-unemployment-rate-surprise-the-market-201102151638.html