(Repeats to additional Reuters clients)
* Traders suspected of trying to manipulate euro/zloty
* Internal controls detected the manipulation attempt
* Commerzbank says incident was an isolated event (Adds source comment, Bafin statement)
By Arno Schuetze and Jamie McGeever
FRANKFURT/LONDON, May 21 (Reuters) - Commerzbank AG has fired one trader and suspended a second on suspicions they tried to manipulate the Polish zloty's euro exchange rate, sources familiar with the development said on Wednesday.
Germany's second-largest lender terminated the contract this week of a Frankfurt-based trader who had been suspended in February, one of the sources told Reuters, adding that the second, suspended trader was based in London, the world's biggest currency trading centre.
It is the first time bank sanctions have affected Frankfurt-based staff in a growing international investigation by regulators of currency manipulation that has already led to 35 people globally being suspended, placed on leave or fired.
The forex investigation is one of a number affecting the banking sector as regulators look at manipulation of rates that are fundamental to the financial system.
Eight financial firms have been fined billions of dollars for manipulating reference interest rates and the probe into the largely unregulated $5.3 trillion-a-day foreign exchange market could prove even costlier.
Individuals affected by the currency investigation have included chief dealers at some of the world's biggest banks and an employee at the Bank of England.
Commerzbank said it had suspended two traders in the case after its internal controls identified the attempted manipulation, but declined detailed comment on the individuals.
"We believe this incident was an isolated event and one from which the bank and the individuals concerned in no way profited," Commerzbank said in a statement.
The disclosure comes a day after German financial watchdog Bafin said it had clear evidence that market participants attempted to influence currency rates and widened an investigation to include many more banks.
Commerzbank had alerted Bafin to the incident, one of the sources said. Bafin has been conducting its investigation into possible foreign exchange market manipulation since the middle of last year, in conjunction with regulators in other countries.
Forex dealers in Warsaw said they had seen no evidence of any successful manipulation of rates. "January was a relatively volatile time for zloty market, but I didn't notice anyone's attempts to fiddle with the zloty," said a dealer at one major bank. "The fundamental question is what kind of manipulation it was, though most probably it had no substantial impact on the market."
A Bafin spokesman said the watchdog was using all possible tools in its investigation, including requests for information as well as special probes, but declined to comment on developments at Commerzbank.
Polish regulator KNF said that according to its preliminary findings no Polish banks took part in any manipulation.
The worldwide investigations of currency markets and reference interest rates show banks are still struggling to control the behavior of some traders, even in the face of tighter regulatory scrutiny following the 2008-2009 financial crisis.
Authorities in the United States, Britain, Switzerland, Germany and Singapore are examining whether traders from different banks worked together to influence currency prices, but also whether they traded ahead of their own customers or failed to accurately represent to customers how they were determining the prices.
Commerzbank's local rival Deutsche Bank,, the world's largest forex trading bank, has suspended several currency traders in North and South America. (Additional reporting by Kathrin Jones in Frankfurt, with Marcin Goclowski and Micha Januszin Warsaw; Writing by Thomas Atkins and Jonathan Gould; Editing by Tom Pfeiffer and David Holmes)