system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: When I exchange currency, why is the exchange rate often given to 8-10 or more decimal places? Surely nobody, even when dealing will millions of dollars, cares after the fourth decimal place.

It seems so insignificant and unnecessarily precise to say "We're offering $1 = £0.8462485301" (as I've just been told by Amazon). As a consumer I only care about the first two decimal places. I can understand if you're trading currencies or working as a business maybe you'd care about the third and *maybe* fourth decimal place. But is anyone really looking at that thousandth of a penny in the fifth decimal place? I'm absolutely certain nobody is looking at the millionth of a penny. And yet most currency exchange places - both brick & mortar and online - offer this insane level of accuracy, providing 8, 10, or even more decimal places. Why? And how do they come up with such precise numbers?
gpt
I've worked in foreign exchange for a number of years.  FX is bigger than all the rest of the markets put together; it's the great granddaddy of them all. 

Global FX trading volume is currently over $5 trillion USD **daily**, 5.5 days per week (the market runs continuously from the NZ open on Sunday evening to when the NYC markets close on Friday at 5pm).  That's over $50 million per second.  It's not unusual for single international transactions to be in the tens of billions of dollars, and professionally traded positions are always at least in the tens, if not hundreds, of millions. 

For ordinary people like you and me who are just trying to exchange cab fare at the airport, there's no difference.  But at the volumes that drive the actual FX market, a change in the seventh and eighth "pip" (number after the decimal) is still a lot of money. 

(And if god forbid you should screw up your pricing and make a rounding error in those digits, there are lots of automated arbitrage desks out there that will immediately flood you with enough trades to bankrupt you.)