Thomas Cook vs. Other Forex Providers – A Comprehensive Comparison

The dynamic and volatile market of foreign currency exchanges is fast-paced and forever changing as it is highly impacted by the political, legal and economic environment of a country. Hence, it is in the best interest of all globetrotters to keep themselves updated on the changing rules and regulations that affect the exchange rates.

What Is Currency Exchange Markets?

Do not worry if you are not a finance specialist. Do not worry if world politics and world trade agendas scare you. Do not worry, if you like to stay miles away from hedge funds, forex dealers and investment firms. Just follow the article for basic knowledge that will help you save money and follow regulations to avoid legal hassles.

It is an over-the-counter global market where exchange rates of currencies around the world are determined. The participants who are involved in this market can sell, buy and speculate on currencies or rather trade in currencies. They can be banks, forex dealers, central banks and investment firms.

The uniqueness of this market includes :

1. It is a market where only currency is traded, not goods or services.
2. The currency is bought and sold in exchange with a different currency. For example, in the Euro market, Euro  is being traded and is being paid for by another currency such as Yen .

Hence, the trading of currency in the foreign exchange market involves simultaneous buying and selling of two currencies. This is how the value of one currency (the base currency) is determined against the value of another currency (or the counter currency). The major pairs of currency include EUR/USD, USD/JPY, GBP/USD and USD/CHF. The strongest and the most popular forex market is US dollar exchange rates, where Euros are valued and traded in US dollars.

Thomas Cook, one of the best forex provider s in the country, facilitates services for 26 different currencies at a competitive exchange rate online.

How Are Exchange Rates Determined?

When you travel abroad, you are likely to carry a currency that is used in the country you are visiting. You usually exchange your home currency to purchase foreign currency, and the amount of foreign currency that you get against the amount of home currency you pay is based on international exchange rates.

There are ways these exchange rates are determined :

1. Floating Exchange Rate: In the global currency market, floating rates are determined by demand and supply. The cost of currency increases with demand and falls when demand is low.
2. Fixed Exchange Rate: Fixed exchange rates are determined against a standard such as gold or any precious metal, where each unit of the currency corresponds to a fixed amount of the metal that exists in the market.
3. Managed Floating Exchange Rate: Currently, this is followed while determining the international exchange rates. In this method, the value of a currency is affected by the economic decisions and policies of the government or the central bank.

There are a few factors that influence exchange rates significantly :

1. Inflation Differential: It is the difference in the inflation rate between two countries. A country with low inflation will always have a higher value in currency and increased purchase power.
2. High Interest Rates: This has a major impact on the value of a currency. A country having a higher interest rate attracts more foreign investments, increasing the demand and value of their currency in the process.
3. Import -Export: When a country exports more than it imports, a trade surplus increases the demand for its currency and hence its value. The currency becomes stronger in the exchange market.
4. Government Debts: At times, the value of government debts influences currency value, if it becomes significant. The investors withdraw due to the risk of losing money and the demand for the currency falls, depleting its market value.
5. Budget Deficits: If there is a mismatch in the balance of payments accounts, the exchange rates will also be affected. The value of imports of goods and services is more than the value of exports and hence there is a deficit in the budget which then cannot be financed by the government. The value of the currency then depreciates in the exchange market.

Since the reasons are all macro, they all seem to be out of your control. The best you can do is to trust one of the leading foreign exchange providers in India, Thomas Cook who has got your back.

It offers the best competitive rates in the market and offers exchange services for about 50 different currencies. You can purchase or sell your currency conveniently online or in any of their branches.

The Borderless Prepaid Multicurrency travel card offered by Thomas Cook is a step ahead in resolving the exchange rate volatility issue. You can load almost 10 different currencies and it will auto-detect the country you are in and the transaction will happen in local currency. This saves you from the losses of currency fluctuations in different countries.

Due to competitive exchange rates offered by Thomas Cook, sending money abroad for friends, families, education, and medical assistance has also become easier and seamless.

The Rate Watch alert service is especially helpful for individuals who need to remit large amounts of money abroad. You can set an alert at your required exchange rate and get notifications once the rate hits your cap. It helps you to take control of the volatile exchange rate market at an individual level.

Thomas Cook’s services are convenient, secure, and transparent as they abide by all compliance requirements set out by the Central Bank and the government.

How Currency Exchange Works

Traditionally, currency exchanges required physical presence at a bank or any authorised currency dealer, as allowed by the Reserve Bank of India. But with digitisation, it has become extremely convenient to have foreign currency without waiting in line in any office. Mobile apps, multicurrency cards, and websites offer ample ways to click and transfer funds in the chosen currency.

Some tips to follow  that can help while exchanging currency during travel are :

1. No fee exchange offices should be avoided as they do not charge currency conversion fees but pay you much less in value than the actual market price.
2. Take the help of websites and apps that are pre-programmed to show you the real-time exchange rates, which can save you from being cheated.
3. Do not get confused or overwhelmed by the terminologies used in exchange systems. The simplest way for an exchange rate explanation is given below:

• • Exchange rate: The units of local currency that you get after exchanging 100 Indian rupees in a country abroad are the local exchange rate. For example, the of units of Yen you get against 100 INR is the exchange rate of Japan.
  • Buy rate: In case you have some foreign currency left with you, at the end of your vacation, you can sell them against Indian Currency. The amount you get back is called the buy rate.
  • Bank-to-Bank Rate: This is a wholesale exchange rate that Banks use amongst themselves. Usually, the rate at which you withdraw cash in foreign ATMs depends on this rate.

1. Exchanging currencies at the airport should be avoided if possible. They have the highest conversion fees. They charge you with an 8-12% margin which is a huge loss if you intend to get all your currencies from one place.
2. Transacting with your international debit and credit cards will incur a huge cost in terms of markup fees and overdrawn charges if spent above the limit. It may also subject you to card scams and leave your entire savings at a huge risk. Use a Forex card instead to avoid such risks and charges.
3. It is always prudent to be future-ready. Exchange your currency in advance and prepare for a safe and peaceful travel experience.
4. Foreign currencies not only change from day to day but also from trader to trader. Try to compare the rates amongst a few to get the best competitive rates for your advantage.

Thomas Cook’s currency converter helps you to be up to date with real-time currency exchange rates and to convert your money easily online. Online currency exchange facilities, especially with a forex card, have become popular due to convenience and cost-effectiveness. Being one of the leading foreign exchange providers in India, it provides the best rates, transparent fee structure and a platform for secured transactions with its Borderless Prepaid Multicurrency Forex Card. You can load the card in advance with multiple currencies and can reload it on the go from your mobile app if you exhaust your budget. It has a host of other benefits like no surcharges in ATMs across ALLPoint Network, a mobile app to check balances, blocking your card if stolen, changing your PIN, and even cashing out once your trip is over. With a free replacement card and a dedicated global customer assistance service, you will never be without help abroad.

Bon Voyage

With a Forex card, international travel has become simpler and more convenient. All you need to do is go to Thomas Cook’s website or mobile app, choose your required currency to be loaded into the card, enter your details and make payment online. Even for cash you can book an order at your desired exchange rate online and have it delivered to your doorstep whenever you are ready to take off.