Now that March Madness has concluded with a return to normalization - Duke defeated underdog Butler in the NCAA basketball tournament - maybe the same will soon be said about China and its artificially low peg to the dollar.

In recent interviews, U.S. Treasury Secretary Timothy Geithner has stated his plan to use the G-20 to advance U.S. interests. One of those interests he intends to advance is for the Chinese to allow the yuan to strengthen versus the U.S. dollar. Some, like Chuck Schumer, have even gone as far to openly label China as a currency manipulator. Many other politicians in Washington are calling for Geithner and the Treasury to increase pressure on China to re-value their currency ahead of the IMF meeting in Washington the week of April 19. This coupled with Geithner's surprise visit to China last week is turning up the rhetorical heat on China to take the US seriously. Aiding the U.S. is the fact that French President Nicolas Sarkozy and South Korean President Lee Myung Bak have also been vocal with their concerns that an undervalued yuan negatively affects global trade flows.

China did appear to be digging in their heals last month as Premier Wen Jiabao warned that countries "should not point fingers at each other" when it comes to currency valuation. However it appears China may be softening their stance after Geithner extended an olive branch during his visit. This is encouraging for those wishing that two nations can patch up their relationship as recent events such as Google announcing plans to withdraw from China, the U.S. announcing plans to sell arms to Taiwan and President Obama meeting with the Dalai Lama have strained relations between the two superpowers.

While many in Washington are feeling the heat from their constituents who believe they stand to benefit from a stronger dollar, many economists stress that any strengthening in the Chinese currency should be conducted at a measured pace so not to disrupt the nascent recovery in the global economy. If Geithner is able to coax a one-off adjustment in the yuan, the effect will most likely be negligible. However, if Geithner is able to convince the G-20 to prod China to adopt a long term revaluation policy, the effects are sure to be more substantive and long lasting.

The question being asked by FX traders and central bankers around the world is how such a policy shift will will affect their self interests. This will certainly play out in the markets in the coming days and weeks if China follows through with a measured, long term revaluation policy for the yuan. If China plays hardball with the G-20 and the U.S. and maintains the current peg to the dollar, expect more jawboning from Schumer, Geithner and company until China makes a meaningful move.