Through the summer and fall of​ 2008, as the global financial crisis began to take​ hold, international financial institutions and sovereign wealth funds significantly increased their purchases of U.S. Treasury securities as a safe haven investment. How should this affect U.S. dollar exchange​ rates?
A.The dollar should depreciate as increased purchases of U.S. Treasuries will lead to lower interest rates and a lower expected return on dollar assets.
B.The dollar should appreciate relative to other currencies because of an increase in demand for U.S.​ dollar-denominated assets.
C.The dollar should depreciate as foreign countries are likely to raise interest rates to compete with the purchases of U.S. Treasuries.
D.The dollar will remain​ unchanged, as there is no direct relationship between U.S. Treasury securities and the U.S. dollar exchange rate.