With the benefit of hindsight, there are 2 distinct answers:
A: To answer the OP's question as asked with a view to understanding pipes and I/O streams:
echo . | xargs open
# Equivalent solution, using the special "$PWD" shell variable.
printf '%s\0' "$PWD" | xargs -0 open
is the most robust way to pass the current directory's path to the open CLI via a pipe in order to have it open that directory in OSX's file-system-browser GUI application, Finder.
Note that pwd | xargs open is NOT robust, because it fails if the current directory path has embedded whitespace - see below.
- openrequires input to be provided via command-line arguments rather than via the- stdininput stream, as is the case here (via a pipe,- |).
- Thus, in order to translate stdin input to arguments, the standard xargsutility is needed.
- xargstakes stdin input - coming from a pipe in this case - and invokes the command specified as its argument (- open, in this case) with the tokenized stdin input  as that command's arguments.
- xargssplits by whitespace by default:- 
- With .as the input, no splitting (or interpretation by the shell) occurs, so it can just beechoed toxargs.
- By contrast, the special $PWDshell variable, which always contains the current dir.'s full path, may contain embedded whitespace, so extra steps are needed to ensure that it's passed toopenas a single argument:
- printf '%s\0' "$PWD"prints the current dir.'s full path terminated with a NUL byte (- 0x0).
- Complementarily, xargs -0splits stdin input into tokens by NUL - resulting in a single token in this case, preserving the value of the single input line - containing$PWD- as is. This is safe to do, because NUL is not a legal byte in filenames.
- Note: -0is a nonstandard extension to the POSIX standard forxargs, but it's implemented in both BSDxargs(as aused on OSX) and GNUxargs(as used on Linux). Remaining POSIX-compliant[1], the next best thing is to use line-based tokenizing with the-Ioption as follows:
 printf '%s' "$PWD" | xargs -I % open %
 
 
 
Thus, in effect the above solutions are equivalent to (what xargs ultimately executes - see next section for an explanation):
open . 
# Equivalent solution.
open "$PWD"
[1] xarg's -I option requires a POSIX system that is also XSI-compliant. If anyone can explain to me what that means in practical terms, I'd be grateful.
B: To provide the best answer with no constraints on techniques employed:
open .
open expects arguments rather than stdin input, and . succinctly and most efficiently represents the current directory, causing open to display the contents of the current folder in Finder.
An equivalent, but more verbose solution is to pass the special shell variable $PWD, which always contains the full path of the current directory (referenced in double quotes, so as to protect it from shell expansions:
open "$PWD"