What happens to the dollar? For years people railed against China for keeping the yuan artificially lowered by buying U.S. Treasury Bonds. This led to Chinese

What happens to the dollar? For years people railed against China for keeping the yuan artificially lowered by buying U.S. Treasury Bonds. This led to Chinese manufacturing being extra competitive, and a larger U.S. trade deficit. Now China is doing the opposite. It is selling treasury bonds to buy yuan to artificially increase the price the yuan and everyone is freaking out. It will do the opposite of what is had been doing by causing the dollar to appreciate, and the yuan to depreciate. This will make foreign goods relatively more expensive for Americans, and American goods relatively cheaper for the foreigners. This effect will be most pronounced when the foreigners are Chinese. These will probably be small effects that won't effect anyone's life enough to be noticed. Whats happens to Treasuries? Nothing. Short term treasury rates are pretty much determined by the FED. Now even more so than usual because of the FED has it's pedal all the way down on the accelerator at 0% interest. Long term treasury rates tend to be determined what people think short terms rates will be over the long term. What primarily determines the interest rate over the long term is U.S. growth and inflation. So if people think this will cause more U.S. growth, long term treasury rates might increase a little.