The Bournemouth winger has still not agreed to a new contract with the club.
It means the Cherries are set to lose him on a free in the summer, and Arsenal are ready to pounce.
The 26-year-old winger has one goal and four assists this term, while he had seven goals and 14 assists in 38 games last year.
He wants to sign a winger, and the fact that Fraser would be a free transfer works in the player's favour.
Arsenal will have limited transfer funds this summer, as they are unlikely to qualify for the UEFA Champions League for next season.