Regulators across the world have opened investigations into the forex markets amid allegations of rate rigging and manipulation Reuters

Two US financial regulators have opened investigations into whether traders manipulated foreign exchange rates in order to profit on the resulting effects on the price of options and exchange-traded funds.

According to Bloomberg, which cited two anonymous sources with knowledge of the probe, the US Securities and Exchange Commission (SEC) is already in the early stages of its investigation. The Commodity Futures Trading Commission (CFTC) has also opened an investigation.

Regulators across the world have opened investigations into allegations of forex market manipulation. Currency traders at some of the world's biggest financial institutions have been suspended, sacked or quit amid the growing scandal.

What are exchange-traded funds (ETFs)?

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

Source: Investopedia

In London, the Financial Conduct Authority (FCA) has started its own probe. The Bank of England (BoE) has also come under scrutiny for allegedly condoning the way currency traders at different banks shared information with each other at meetings with the senior bankers.

Communications between traders are a key part of several regulatory probes across the world into suspected currency market manipulation. The BoE denied ever condoning activity that was against the rules.

The BoE has suspended one official and revealed it stopped meeting a group of top London currency dealers in February 2013 amid an internal review.

"The BoE does not condone any form of market manipulation in any context whatsoever," said the central bank.

"The Bank has today reiterated its guidance to staff regarding management of records and escalation of important information."

It added that the internal review has not found any evidence that BoE staff colluded in any such manipulation or shared confidential client information.

The global currency market is worth $5tn (£3.1tn, €3.7tn) in daily trading.

What are options?

An option is a contract that gives the holder of an asset the chance, but not the obligation, to buy or sell within a specified period of time if the asset hits a specified "strike price".