Direct answer
Pip value is the money change in your account from a one-pip move, based on lot size and then converted into your account currency. For USD/CAD and AUD/USD, the main difference is which currency is the quote currency in the pair, because that determines the “starting” currency of the pip value before any conversion.
Mechanism and definitions
A pip is a standardized price increment used to quote FX moves. In most major FX pairs quoted to five decimals, a “one pip” move corresponds to a change of 0.0001 in the price (the exact pip size can vary by instrument and quoting format, so you must confirm the pip definition used by your platform).
A currency pair quote has the form BASE/QUOTE:
- In USD/CAD, the base is USD and the quote is CAD.
- In AUD/USD, the base is AUD and the quote is USD.
That quote currency matters because a one-pip move initially produces a value in the quote currency terms.
Step 1: Start with the pip formula (in the quote currency)
Using the common FX convention where 1 standard lot = 100,000 base units, a simplified pip-value approach is:
- Pip value (quote currency per standard lot) = pip_size × (100,000 / current_price)
Where:
- pip_size is the decimal step that your platform treats as one pip (often 0.0001 or a related increment depending on quoting).
- current_price is the market price of the pair, expressed in quote per base (e.g., CAD per USD for USD/CAD).
This produces a result in the quote currency of the pair.
Step 2: Convert pip value into your account currency
If your account currency equals the pair’s quote currency, the pip value from Step 1 is already in your account currency (no further conversion needed).
If your account currency differs, convert the quote-currency pip value using the relevant exchange rate(s). The conversion can be direct (quote-to-account) or routed through an intermediate currency if needed.
Step 3: Apply to USD/CAD and AUD/USD
USD/CAD
- Quote currency = CAD.
- Pip value from Step 1 is in CAD per your lot size.
- If your account is in USD, you would convert CAD → USD to express the pip value in USD.
AUD/USD
- Quote currency = USD.
- Pip value from Step 1 is in USD per your lot size.
- If your account is in CAD instead, you would convert USD → CAD for the pip value in CAD.
Step 4: Include non-standard lot sizes
If you trade less than 1 standard lot, scale linearly:
- pip value for your lot size = pip value per standard lot × (your_lotsize_in_standard_lot_units)
For example, if your order is 0.20 standard lots, pip value is 0.20× the standard-lot pip value. The linear scaling assumption holds when pip valuation is computed from position size in base units.
Evidence / worked example (with explicit assumptions)
Below is a calculation template showing the routing logic. It uses placeholders because real prices change continuously; you can plug in the price and pip size your platform uses.
Assumptions:
- One standard lot = 100,000 base units.
- Pip size for the platform = 0.0001 for both pairs (confirm this for your instrument settings).
- Account currency is USD for the USD/CAD case and CAD for the AUD/USD case.
Example A: USD/CAD pip value in a USD account
- Start in CAD (quote currency):
- PipValue_CAD = pip_size × (100,000 / Price_USD_CAD)
- Convert CAD → USD:
- PipValue_USD = PipValue_CAD × (USD per 1 CAD)
You obtain “USD per 1 CAD” from the conversion rate you use for CAD-to-USD (directly, or via a required intermediate currency consistent with your platform’s pricing).
Example B: AUD/USD pip value in a CAD account
- Start in USD (quote currency):
- PipValue_USD = pip_size × (100,000 / Price_AUD_USD)
- Convert USD → CAD:
- PipValue_CAD = PipValue_USD × (CAD per 1 USD)
Again, you use the conversion rate(s) consistent with your platform.
What stays the same across the two pairs
- The structure of the math is the same: lot size scaling, pip-size × (100,000 / price), then currency conversion.
What changes
- The quote currency changes (CAD for USD/CAD vs USD for AUD/USD), so the conversion leg you need to reach the account currency changes.