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What are forex pips?In order to obtain the dollar value of the pip if the quote currency is anything other than US Dollar, the results must be converted to dollars using the current exchange rate between the quote currency and the US Dollar. Here is an example:
In order to make the conversion to USD, you need the USD/JPY exchange rate. Suppose the USD/JPY rate is 101.02. The Dollar pip value will be ¥ 1000/101.02= $ 9.89. Therefore, 1 pip is equal to $ 9.89 in the case of USD/JPY for a standard lot at the exchange rate of 101.02.
Wednesday, 16th September 2009
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