The correct answer is C. Supply and demand.
The value of money is being determined by its demand. The U.S dollar rises when demand for treasuries is still high.
The supply and demand of a currency it has been determined by its value. For example, a country prints a lot of money than the value to other currencies will be declined reason being supply is greater than demand.
There will be inflation which will occur if goods price increases or the money losses value compared to other goods.