Why Does Pip Size Change Between Currency Pairs?

In forex trading, pip size is one of the most fundamental concepts—but also one of the most misunderstood. Many new traders assume that pip size is constant across all currency pairs. That’s far from the truth. In reality, size varies depending on the currency pair, and this can directly affect your trade outcomes.

Understanding the size is essential for managing position sizing, calculating risk, and assessing the real impact of market movements. In this article, we’ll break down exactly why size changes between currency pairs and what it means for traders in practical terms.

What Is Pip Size and Why Does It Matter?

Pip size refers to the standard unit of measurement that expresses the change in value between two currencies. For most currency pairs, size is 0.0001. However, for currency pairs involving the Japanese yen, pip size is typically 0.01.

Let’s look at examples:

If EUR/USD moves from 1.1050 to 1.1051, that’s a 1 pip movement.
If USD/JPY moves from 145.00 to 145.01, that’s also 1 pip—but the pip size is 0.01.

This difference might look small, but it can lead to big variations in pip value and risk exposure. That’s why understanding pip size is crucial.

Pip value in forex trading is directly tied to pip size. If you trade without knowing how pip size varies, you could either overestimate or underestimate your profit and loss on a trade.

How Decimal Precision Affects Pip Size?

One reason pip size differs between currency pairs is due to decimal placement. Most major currency pairs use four decimal places. However, pairs involving the yen usually quote only two decimal places. This isn’t random—it’s because of the relative value of the currencies involved.

The Japanese yen, for example, is valued much lower than most major currencies. That makes a movement of 0.0001 irrelevant. So instead, yen pairs use 0.01 as the pip size. It’s a logical adjustment based on value and usability.

In short:

Most pairs (like EUR/USD): pip size = 0.0001
Yen pairs (like USD/JPY): pip size = 0.01

This decimal adjustment is the first major reason behind currency pair pip differences.

Pip Size and Currency Positioning in the Pair

Another factor is the role each currency plays in the pair—base or quote. In a currency pair like GBP/USD, the base currency is GBP, and the quote currency is USD. The pip value in forex trading is always measured in terms of the quote currency.

For example, a one pip movement in GBP/USD (0.0001) is worth $10 when trading a standard lot of 100,000 units. But this only holds true when USD is the quote currency, and your trading account is also in USD.

If you’re trading a pair like USD/CHF, where USD is the base currency and not the quote, pip values are first expressed in CHF and then converted back to USD. This adds another layer of variability.

So even if the size remains constant at 0.0001, the actual dollar value of a pip changes depending on the quote currency and your account currency.

This is why traders must understand how pip size and pip value shift based on the base/quote configuration in each currency pair.

The Role of Exchange Rates in Pip Value

Let’s take it one step further. Exchange rates also influence pip value in forex trading. The value of a single pip isn’t fixed—it fluctuates with the exchange rate of the pair.

For example:

A 0.0001 change in EUR/USD at 1.1000 equals $10 per pip for a standard lot.
A 0.01 change in USD/JPY at 145.00 equals approximately $6.90 per pip.

That’s a noticeable difference. Even though you may be using the same lot size, the pip value varies because the underlying exchange rate differs.

If your account is in a different currency than the quote currency, the conversion factor introduces even more variation. This is common when trading cross-currency pairs like EUR/GBP or AUD/JPY.

In those cases, your pip profits or losses are calculated in a third currency, converted to your base account currency. That affects both your trading lot size impact and your risk assessment.

Examples of Pip Size and Value Differences

Let’s simplify this with a comparison table for a standard lot (100,000 units):

Currency Pair	Pip Size	Approx. Pip Value (USD)
EUR/USD	0.0001	$10.00
GBP/USD	0.0001	$10.00
USD/JPY	0.01	$6.90
USD/CHF	0.0001	$9.30
AUD/JPY	0.01	$7.20
EUR/GBP	0.0001	$12.00

This shows how both pip size and pip value vary. You can’t assume a pip is always worth $10.

That assumption leads to inconsistent risk profiles across trades.

This highlights the importance of forex pip calculation before placing a trade.

How Brokers Quote Pip Size and Pipettes?

Some brokers use fractional pip pricing, quoting prices to five decimal places instead of four. In those cases, the last digit is called a pipette—equal to one-tenth of a pip.

So instead of quoting EUR/USD as 1.1050, it might appear as 1.10503. This gives more precision, especially useful for scalpers and high-frequency traders.

However, this doesn’t change the size itself. Size remains 0.0001 for EUR/USD. The pipette just adds finer detail.

Trading platforms also offer pip calculators to help determine pip value in forex trading instantly. These tools factor in the pip size, lot size, currency pair, and exchange rate to give you a precise value per pip.

Using these calculators helps manage trading lot size impact with better accuracy.

Why Traders Must Adjust to Currency Pair Pip Differences?

Ignoring pip size differences can cost you—literally. When you apply the same stop-loss in pips to all pairs without adjusting for value, you may overexpose or underexpose your account.

Here’s how it plays out in real-world trading:

You set a 50-pip stop-loss for EUR/USD and USD/JPY.
On EUR/USD, a pip is $10, so you risk $500.
On USD/JPY, a pip is $6.90, so you only risk $345.

Same pip count, different monetary risks.

To manage risk effectively, you must adjust for both pip size and pip value.

This is especially important when trading multiple pairs. Consistent risk management depends on accurate forex pip calculation and proper sizing.

Here’s what traders should always do:

Calculate pip value before placing trades.
Adjust lot size to equalize monetary risk per pip.
Use a pip calculator or script to automate this process.

That way, your strategy stays consistent across currency pairs.

Impact of Account Currency on Pip Value

If your trading account is in a currency different from the quote currency of your trade, pip value must be converted. For instance, if your account is in GBP and you’re trading USD/JPY, your pip profit will be in JPY, and then converted to GBP.

This currency conversion introduces more variability in pip value. Exchange rates now play a dual role—once in the trade itself, and again in calculating your final profit or loss.

That makes it essential to track forex pip calculation across all trades, especially when managing diverse pairs or using non-USD base currencies.

It also directly impacts your trading lot size impact. A misjudged pip value may lead to a wrong lot size selection, which distorts your risk-reward ratio.