The Reserve Bank had also noted the price movement prior to the announcement of the monetary policy decision in February and brought this to ASIC's attention at the time, the spokesperson said. Last month the dollar plunged 0.8 per cent in the 10 seconds before the official release of the February rates decision, when the RBA surprised the market with a 25 basis point cut to the cash rate. On Tuesday, those people or organisations behind the trades under review made millions of dollars by pre-empting the wider market move to start buying the Aussie dollar after it was officially announced that the Reserve Bank had kept the official cash rate on hold. Prior to the announcement most economists were tipping a 25 basis point cut. The probe has been welcomed by foreign exchange traders worried suspicious moves in the dollar in the moments before the RBA's interest rate decision two months in a row could point to a breakdown in the integrity of the market, either as the result of leaks or hacking by computerised trading systems.

"There have been notable instances in recent years of foreign exchange markets moving in the minutes before the release of official economic data out of other countries such as China and Japan, but the moves in the Australian dollar immediately prior to the release of the RBA rates decision both this month and last are the most noticeable moves ahead of the release of any Australian data I have seen in my career," CBA chief currency and rates strategist Richard Grace said. "We certainly welcome the investigation into the matter," Mr Grace said. Eyebrows were raised around the world as currency traders in the foreign exchange hubs of London and New York observed the peculiar spike on Tuesday. One offshore source said trading volume and activity in the minute prior to the statement pointed to algorithmic trading that made several hundred quick orders and cancellations. It is estimated trading volumes reached around $500 million during the pre-decision spike. People or systems that traded ahead of the March rates decision announcement could have made up to $2.5 million profit ahead of the release and around $5 million following the decision, the offshore source said. That estimation is based on cross-referencing the volume estimates and the dollar's Tuesday afternoon high at US78.40¢.

The offshore source said the impression of informed trading in Australian currency "further undermines the micro-structure of foreign exchange markets". Federal Treasurer Joe Hockey said that he was concerned by reports of extraordinary trades before the release of the Reserve Bank decision on Tuesday and had spoken to RBA governor Glenn Stevens about the matter on Wednesday morning. "I'm satisfied that that investigation will be properly undertaken," Mr Hockey said. The starting point of the ASIC investigation is likely to be identifying who booked and profited from the trades that caused the spike in the dollar just before the release of the RBA statement on Tuesday. Algorithmic trading risk

The rise of algorithmic trading, which uses software to automate trades rapidly, is making it more difficult for regulators to catch irregular activity. Any investigation could be expected to review the risk that algorithmic trading systems may have illegally accessed, or "hacked", the electronic feeds that simultaneously release the RBA statement to its website and other platforms such as Bloomberg and Thomson Reuters. "The Aussie dollar moved sharply up about 30 seconds before the RBA surprised most analysts by holding rates on Tuesday. Maybe that is a coincidence, but the dollar moved in the opposite direction about 30 secs before the February announcement as well! Two jumps in the right direction in a row definitely raises some questions," one senior stockbroker said Sharp jumps in both February and March may yet be shown to be the result of legitimate trading that took big last-minute bets on the RBA board's thinking and got it right. "These sorts of jumps just prior to an important release, while attention grabbing, are not always necessarily insider trading," ThinkForex currency trader and analyst Matt Simpson said. However the overwhelming feeling among experienced traders who spoke to Fairfax Media is that the spike appears to be the result of irregular trading that warrants closer attention by the authorities.

Traders also noted some curious price action in the three-year bond futures contract – one of the most actively traded interest rate derivatives. The price dropped by five basis points, from 98.220 to 98.17 seconds before the 2:30 AEDT announcement on Tuesday. The contract hit 98.110 after the announcement before settling at 98.14. The price of the three-year bond futures moves inversely to interest rates which meant traders stood to gain by selling the contract into the decision to hold rather than cut rates. CORRECTION: An earlier version of this story incorrectly attributed the comments of CBA chief currency and rates strategist Richard Grace to ANZ Bank interest rate strategist Martin Whetton. This was a reporter error. ANZ Bank has not contributed to this story.