Pip (percentage in point) is the smallest change in four decimal place currency quotes (as well as in two decimal place quotes for pairs containing JPY). The fifth digit after the decimal point in quotes for currency pairs (as well as the third one for pairs with JPY) shows the price change discreteness within the four (two) decimal place quotes, i.e. the minimum quote change.
Quotes with 5 decimal places allow better transparency and better ability to catch better deals. For example, instead of 2 pips spread (1.5030 Bid 1.5032 Ask), a trader can get a 1.7 pip spread (1.50301 Bid 1.50318 Ask).
To know what a pip is in 5 digit quote, take the exchange rate and count 5 digits backwards. For instance, the EUR/USD is at 1.00615. Count 5 digits from the first: 1, 0, 0, 6, 1. The 1 is the 5th digit in the quote and it's at the 4th position after the decimal point, so a pip for the EUR/USD is 0.0001. The last digit in 5 decimal pricing is a ‘fractional’ pip. In our example is 8.1 ‘fractional’ pip is 0.1 of a pip. To calculate pip value you can use the following formula:

Example 1. 0.1 standard lot EUR/USD at the price 1.33391.

To convert EUR 0.07496 to USD you must multiply:


As you can see from the example 1 - ‘Fractional’ pip value is $0.1 that means 1 pip value is $1.
Example 2. 0.1 standard lot USD/JPY at the price 84,058.

As you can see from the example 2 - ‘Fractional’ pip value is $0.1 that means 1 pip value is $1.