Currency pairs are formed with Base and Quoted currencies. The first three letters are the base currency and the last three are the quoted currency. For example EURUSD, EUR is the base, and USD is the quoted currency.
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For currency pairs that are USD quoted, 1 PIP is the movement of the currency pair in either direction by .0001
Currency pairs are formed with Base and Quoted currencies. The first three letters are the base currency and the last three are the quoted currency. For example EURUSD, EUR is the base, and USD is the quoted currency.
​
For currency pairs that are USD quoted, 1 PIP is the movement of the currency pair in either direction by .0001
Currency pairs are formed with Base and Quoted currencies. The first three letters are the base currency and the last three are the quoted currency. For example EURUSD, EUR is the base, and USD is the quoted currency.
​
For currency pairs that are USD quoted, 1 PIP is the movement of the currency pair in either direction by .0001
Currency pairs are formed with Base and Quoted currencies. The first three letters are the base currency and the last three are the quoted currency. For example EURUSD, EUR is the base, and USD is the quoted currency.
​
For currency pairs that are USD quoted, 1 PIP is the movement of the currency pair in either direction by .0001
Forex and Futures Trading
If USD is the Base Currency
So far we have seen how the PIP cost works if USD is the quoted currency, now let's see how to calculate the PIP cost for currency pairs where USD is the base currency. For example, USDCHF and USDCAD are such currency pairs.
For every currency pair except for USDJPY, one PIP is the movement of the currency pair in either direction by .0001. For example, if USDCAD moved from its current rate of 1.3397 to 1.3398, then we can say USDCAD has gained its value by one PIP. In the same way, if USDCAD dropped to 1.3396, then we have suffered a loss of one PIP.
The case of USDJPY
For USDJPY, one PIP is the movement of the currency pair by .01 in either direction. For example, if USDJPY is trading at 107.5605, then one PIP movement for the currency is if the currency pair moved from its current position of 107.5605 to 107.5705 to appreciate by one PIP or to 107.5505 to drop its value by one PIP.