Hi @musicguy1967,
It’s important to understand there is a difference between physically exchanging euros for Japanese yen (as a foreign traveler or international business does) and speculating on the EUR/JPY rate.
When speculating on the rate, you do not physically exchange one currency for another, because doing so would add unnecessary expenses to your trading costs and eat into potential profits.
Forex brokers let you trade any currency pair they offer regardless of the currency denomination of your trading account with them.
For example, suppose you have a US dollar-denominated trading account with FOREX.com and want to trade EUR/JPY.
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You buy one standard lot (100,000 units) of EUR/JPY at 129.15[0]. That means you bought 100,000 euros at a price of 12,915,000 Japanese yen.
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Later you close your trade by selling EUR/JPY at 129.21[0]. That means you sold 100,000 euros at a price of 12,921,000 Japanese yen.
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The difference between the prices you bought and sold is 6,000 Japanese yen which is your profit. FOREX.com will display this profit in terms of your account currency, which is US dollars, based on the current USD/JPY rate.
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For the purpose of this example, let’s assume USD/JPY is trading at 111.30. That means your 6,000 Japanese yen profit will appear as about $53.91 in the P/L for your trade.
The fact that you are not physically exchanging currencies in order to speculate on the rates also explains why you can short GBP/USD (sell the rate to seek a profit from a price drop) in a US dollar-denominated account, even though you do not physically hold any British pounds.