The Swiss Market Supervisory Authority (FINMA) said it is coordinating its investigation closely with authorities in other countries “as multiple banks around the world are potentially implicated”.
FINMA said it would release no further details on the investigations or the banks potentially involved.
The authority’s spokesman Vinzenz Mathys was also not commenting on the investigation, which has immediately prompted media speculation.
In June, Britain's Financial Conduct Authority launched a probe into possible manipulation of the currency markets.
This came after a Bloomberg News report that traders shared information and used client orders to influence currency rates and to boost their profits.
FINMA's announcement comes less than two weeks after Swissquote Bank, based in Gland in the canton of Vaud, announced that it was acquiring major Swiss forex broker MIG Bank for an undisclosed price.
MIG, based in Lausanne, has a workforce of 120 people with offices in Zurich, London and Hong Kong.
When it announced the decision on September 25th, Swissquote said that it expected forex income to represent around half of its total net revenues for the company.
Swissquote said its forex volume in the first half of 2013 amounted to 158 billion francs and accounted for 26.2 percent of total net revenues.
However, the largest currency trader in Switzerland by volume is UBS, with an estimated 10 percent share of all global trading in the forex market, dominated by a handful of large banks, according to a survey earlier this year by Euromoney Institutional Investor.
UBS has not commented on the FINMA announcement.