Direct answer
Pip value for EUR/AUD is the change in monetary value (in your account currency) caused by a one-pip move in the EUR/AUD quote. To calculate it, you start from the instrument’s pip size and contract size, then translate that price-based move into money using the EUR/AUD rate and, if needed, convert into your account currency.
What “pip value” means
A pip is the smallest quoted price increment that a forex platform uses for a pair. For many major currency pairs, a common convention is 0.0001 for “pip,” but the exact definition can vary by broker or instrument. Pip value is then the money amount corresponding to one pip of price movement.
Mechanism: the core calculation
1) Start with pip size and contract size
Assume:
- pipSize = the pip increment in the pair’s quote currency per one unit of base price (often 0.0001 for many FX quotes, but verify your instrument).
- contractSize = how many units of the base currency (EUR) your position controls (e.g., one “standard” FX lot is often 100,000 EUR, but use your platform’s actual contract specification).
For EUR/AUD, the quote currency is AUD and the base currency is EUR.
A one-pip move changes the EUR/AUD price by pipSize, so the value change in quote terms relates to:
- Price move: pipSize AUD per EUR
- Position notional in EUR: contractSize EUR
So the quote-currency pip value (in AUD) is typically modeled as:
- pipValue_in_AUD = contractSize × pipSize
This works cleanly when your pip definition and your contract size are expressed in the same base-currency terms.
2) Convert pip value into your account currency
If your account currency is AUD, the money impact is already in the quote currency, so:
- pipValue_in_account = pipValue_in_AUD
If your account currency is EUR, you must convert the AUD amount into EUR. A simple way is to use the current EUR/AUD exchange rate R = EUR per AUD or AUD per EUR—but be careful with the direction.
A robust approach is to express conversions explicitly:
- Let EUR_AUD = price meaning AUD per 1 EUR.
- Then 1 AUD = 1 / EUR_AUD EUR.
So if pipValue_in_AUD is known:
- pipValue_in_EUR = pipValue_in_AUD ÷ EUR_AUD
3) If account currency is neither EUR nor AUD
When the account currency is a third currency (e.g., USD), you do an extra conversion step:
- First compute pip value in AUD: pipValue_in_AUD = contractSize × pipSize
- Then convert AUD into your account currency using an appropriate FX rate involving AUD.
In general form:
- pipValue_in_account = pipValue_in_AUD × (AUD_to_account conversion factor)
The conversion factor depends on whether you have a direct rate or you must chain two rates. The key is to keep the multiplication/division direction consistent with the “per 1 unit” meaning of each FX quote.
Evidence or example (with explicit assumptions)
Example A: account currency is AUD
Assume:
- contractSize = 100,000 EUR
- pipSize = 0.0001 AUD per EUR
Then one pip move changes price by 0.0001 AUD per EUR. For the whole position:
- pipValue_in_AUD = 100,000 × 0.0001 = 10 AUD per pip
So if your account is in AUD:
- pipValue_in_account = 10 AUD
Example B: account currency is EUR
Using the same pipValue_in_AUD = 10 AUD and assuming EUR/AUD price EUR_AUD = 1.60 AUD per 1 EUR:
- pipValue_in_EUR = 10 AUD ÷ 1.60 (AUD per EUR) = 6.25 EUR per pip
Material limitation: platform conventions may differ
The above examples rely on two assumptions that can break the result:
- pipSize convention may not be 0.0001 for your specific instrument.
- contractSize definition (how many EUR one contract represents) can differ across brokers and product types.
A small mismatch in either input changes pip value proportionally.
Limitations and risks (what can go wrong)
1) Pip definition mismatch
Some instruments use different pip fractional sizes (for example, quoting “pipettes” or using different tick sizes). If your platform’s pip is not 0.0001, the pipSize must be replaced accordingly.
2) Contract specification mismatch
Pip value scales with contractSize. If you use a generic “standard lot” assumption but your instrument uses a different unit size, your pip value will be wrong.