Fractional PIP

Fractional PIP

Historically, major FX pairs would quote in 4 decimal places and 2 decimal places if it was currency pairs that included the Japanese yen. However, over the last few years, all the major FX pairs quote beyond the standard 4 & 2 decimal places to 5 and 3 correspondingly. This addition in the price quote is called fractional pip or pipette.

For instance, if the USD/CAD pair moves from 1.10105 to 1.10106, the 0.00001 increase in the exchange rate is one fractional pip. Likewise, if the GBP/JPY pair moves from 145.054 to 145.055, the 0.001 increase in the exchange rate is one fractional pip.