Market convention determines the number of decimal places used to quote an exchange rate. Which ONE of the following rates does NOT comply with market convention?

Select one:
AUD/USD   0.6400
USD/JPY   145.24
GBP/USD   1.4955
USD/HKD   11.3450

The exchange rate that does **not** comply with market convention is:

**USD/HKD 11.3450**

**Explanation:**
- The market convention for exchange rates is typically as follows:
  - For currency pairs involving **JPY (Japanese Yen)**, quotes are usually provided with **two decimal places**.
  - For most other major currency pairs (e.g., AUD/USD, GBP/USD), quotes are usually given with **four decimal places**.

Given this, the pair USD/HKD is usually quoted with **four decimal places** like the others. However, USD/HKD 11.3450 has **five decimal places**, which does not comply with the market convention of four decimal places.

Would you like further details or have any questions?

Here are 8 questions related to this topic:
1. What is the market convention for quoting EUR/USD?
2. How are exchange rates typically quoted in the foreign exchange market?
3. Why are some currency pairs quoted with two decimal places instead of four?
4. Can you explain the difference between bid and ask prices in forex trading?
5. How does market convention impact the accuracy of forex trading?
6. Are there exceptions to the market convention rules in specific circumstances?
7. How are exchange rates quoted for cross-currency pairs?
8. What is the significance of pip value in forex trading?

**Tip:** In forex trading, understanding the number of decimal places (or "pips") for a currency pair is crucial, as it can significantly impact profit or loss calculations.

Explore why some exchange rates do not comply with market convention and how this impacts forex trading. Learn about the significance of decimal places in currency pair quotes with examples like AUD/USD 0.6400, USD/JPY 145.24, GBP/USD 1.4955, and USD/HKD 11.3450.

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