The investigation into alleged manipulation of the foreign exchange market now takes in most of the world's biggest banks, regulators in three continents, potentially hundreds of traders — and now the U.

The banks include HSBCCitigroupJPMorgan ChaseRoyal Bank of Scotland and UBS.

At the center of the probe seems to be traders eager to make a quick profit by buying up currencies just before they knew clients were going to buy large amounts of the same currency at the daily "fix".

This way the traders could sell on at a profit when the price rose at the "fix.

Banks Manipulated Foreign Exchange in Ways You Can't Teach - Bloomberg

Some also appear to have passed on information to traders at other companies about big upcoming trades. All of this could have artificially raised the value of one currency against another.

Forex manipulation chat - lazuxyderonav.web.fc2.com

The last nail in chat rooms' coffins? Traders are supposed to have colluded to set a currency's rate through conversations in chat rooms, usually via their Bloomberg or Reuters terminals.

Several of the investment banks involved have since banned the use of such chat rooms, which also made an appearance during the scandal surrounding the fixing of the key overnight bank rate Libor. The issue around which most debate has focused is whether what happened amounted to illegal "front-running" profiting by your knowledge of client orders or just risk management for the bank's clients.

Banks often manage the risk of a jump in the price of a currency made by a large order, by spreading out the order ahead of the "fix. Forex troubles ahead for Carney. If the rates were rigged, it could have affected the hedges which companies dummy stock trading india operations in more than one country usually put in place to minimize their exposure to currency swings.

It could also have affected the value of doubly stochastic trading strategy and funds tied to currency values. These can all affect investments made by ordinary shareholders and even the prices paid by consumers.

On Tuesday, Mark Carney, governor of the Bank of England, will face questions on whether Bank of England officials effectively told leading foreign exchange traders that such actions were not illegal. All the minutes of the key meeting, in Aprilsay is that there was "a brief discussion forex api demo account mt4 extra levels of compliance that many bank trading desks were subject to when managing client risks around the main set piece benchmark fixing.

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Here's a look at the key issues involved: Trader tactics Traders are supposed to have colluded to set a currency's rate through conversations in chat rooms, usually via their Bloomberg or Reuters terminals. Forex troubles ahead for Carney Why it matters If the rates were rigged, it could have affected the hedges which companies with operations in more than one country usually put in place to minimize their exposure to currency swings.

How is the Bank of England involved? Catherine Boyle Senior Correspondent, CNBC.