What is a Pip?

A ‘pip,’ or a ‘Percentage in Point,’ is a single unit of the measurement of the movement of one currency in relation to another. One pip refers to the very last digit of a currency price.

For instance, the rate of EUR/USD is 1.3365, and a one pip movement would be 1.3366.

The major currencies are traditionally priced to four decimal places, and a pip is one unit of the fourth decimal point: for dollar currencies this is to 1/100th of a cent.

It is the smallest price change that a given exchange rate can make.