EUR/USD, USD/JPY and EUR/GBP: quotes and pip value

The essentials

A move's monetary value depends on size, price increment and quote currency, with possible conversion into account currency. Do not use identical pip precision for every pair or confuse a pip with the last decimal.

Understand the mechanism, not just the definition

Pip value first arises in quote currency. A different account currency requires conversion, which can vary with exchange rates. Ten dollars per pip is therefore not a universal pair rule. Start with base units, pip size and result currency, then convert to account currency.

Example and verification

Hypothetical example: 10,000 EUR/USD units and a 0.0001 move equal USD 1 before costs. In EUR/GBP, they equal GBP 1. Expressing this in USD requires a documented conversion rate.

Worked case, step by step

For a hypothetical 100,000-unit contract at one lot, EUR/USD with a 0.0001 pip gives USD 10, USD/JPY at 0.01 gives JPY 1,000, and EUR/GBP at 0.0001 gives GBP 10. At illustrative JPY 150/USD and USD 1.25/GBP, the latter two are about USD 6.67 and USD 12.50. These are example conversions, not current quotes.

What to verify when applying this

Read specifications and lot size. For JPY pairs, check convention and precision. Convert spreads into the same currency: fewer pips do not always mean a lower monetary cost.

Practice: verify it in your environment

Learn by observing the process and keeping its data. Complete this practice in demo or using documentation, without sending real orders or adding capital for the exercise. Record differences between the example and your account specifications.

1. Record the currency of each pip value before comparison.
2. Check tick value and profit currency in specifications.

Test your understanding

Try the question before revealing the answer. Justify the conclusion and its assumptions rather than memorizing a number.