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Barclays is facing a probe in New York over foreign exchange rate riggingReuters

Barclays Plc and Deutsche Bank are facing a probe in the US over the alleged use of algorithms on their trading platforms to manipulate foreign-exchange rates, according to media reports.

A source told Bloomberg that regulators in New York have found evidence of the practice by the banks, which suggests "a systemic problem involving automated tools".

The algorithms' use is being scrutinised by the New York Department of Financial Services (DFS), the source noted.

Benjamin Lawsky, the head of DFS, has ordered a monitor to be installed at Deutsche Bank and already has one in place at Barclays, Reuters reported separately, citing a source.

Deutsche Bank had earlier said in a statement that it received requests for information from regulatory authorities as part of their investigation into trading in the foreign exchange market. The bank added that it is cooperating in the probe.

It is not clear if there is a link between the banks in using the algorithms that were embedded in Barclays's BARX trading platform and Deutsche Bank's Autobahn system, according to Bloomberg's source.

A number of banks have come under the scanner of regulators in the US, the UK and Switzerland in connection with the rigging of foreign exchange rates.

In November, six banks agreed to pay $4.3bn (£2.7bn, €3.5bn) to US, UK and Swiss authorities in the first settlements in connection with the global probe. The banks are Royal Bank of Scotland Group Plc, HSBC Holdings Plc, Citigroup Inc, JPMorgan Chase & Co, UBS AG and Bank of America Corp.

Criminal and antitrust authorities are continuing to investigate practices in the foreign-exchange market.

The UK Financial Conduct Authority (FCA) earlier ordered about 30 other banks including Deutsche Bank, to overhaul their practices. The FCA is not planning to fine these firms.