Summary:
The last decimal place of the exchange rate, also known as "point" or "pip", generally represents a small change of one millionth, and is the basic unit in foreign exchange transactions. In most currency pairs, the last decimal place of the exchange rate is usually 0.0001, which is 1 point per pip.
The last decimal place of the exchange rate, also known as "point" or "pip", generally represents a small change of one millionth, and is the basic unit in forex trading. In most currency pairs, the last decimal place of the exchange rate is usually 0.0001, which is 1 point per pip. But there are also a few currency pairs with the last decimal place being 0.01 or 0.00001.
For example, for a quotation of the exchange rate between the US dollar and Japanese yen, it is usually displayed to two decimal places, where the last decimal place represents one percent. For example, 109.50 indicates that 1 US dollar can be exchanged for 109.50 Japanese yen.
For the quotation of the exchange rate between the euro and the pound sterling, it is usually displayed to four decimal places, where the last decimal place represents one thousandth. For example, 0.8647 indicates that 1 euro can be exchanged for 0.8647 Pound Sterling.
It should be noted that in some cases, the exchange rate may only be displayed to one decimal place or less, which is usually due to small trading volume or market fluctuations.
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