The financial market watchdog has launched an investigation into a spike in the Aussie dollar just before the Reserve Bank announced its April interest rate decision.

The Australian dollar shot up by more than half a cent in the ten trading minutes before the official announcement that the cash rate would stay at its record low of 2.25 per cent for another month.

At approximately 2:20pm on Tuesday, local currency surged from 75.97 US cents to around 76.7 US cents.

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It is believed that a currency dealer at a major bank was involved in a pivotal transaction on the cusp of the decision being made public.

The Australian Securities and Investment Commission (ASIC) confirmed on Monday evening it was investigating currency transactions ahead of the RBA announcement, but it did not comment on the specific transaction that was a major talking point among traders yesterday.

“ASIC confirms it will investigate a spike in the Australian dollar shortly before the Reserve Bank’s monetary policy decision today,” the regulator said in a statement.

“The investigation will look at trading in the dollar prior to the RBA’s interest rate decision statement at 2.30pm.

“ASIC will not make any further comment at this point in time.”

The regulator is also investigating movements in the Australian currency shortly before the Reserve Bank’s rate announcements in February and March.

Trading in the minutes leading up to these announcements were also marked by sharp turns in sentiment.

As would be expected after a surprise decision to hold the cash rate, the Australian dollar continued to soar after the RBA’s announcement on Tuesday.

It hit 76.82 US cents within seconds and touched a high of 77.12 US cents later in the afternoon.