The title really says it all. And it's not a rhetorical question; I don't know the answer. But if the US is really concerned (H/T Mark Thoma) about the US dollar being too high against China's yuan, and it believes China is "artificially" preventing the yuan from appreciating against the dollar by foreign exchange market intervention, why can't the Fed just intervene in the opposite direction, by buying yuan?
Currency pegs are usually unilateral; at one time the Bank of Canada used to peg the Loonie against the US dollar. Sometimes currency pegs are bilateral; before the introduction of the Euro, France and Germany jointly intervened to keep the franc/mark exchange rate at an agreed on value. But it would be interesting to see what happened if China were trying to depreciate the yuan against the dollar, and the US were trying to depreciate the dollar against the yuan. Who would win?
Regardless of who would win, the attempt by each side to depreciate its currency against the other would increase the world money supply. Not such a bad war to have, at the moment. What's the opposite of "collateral damage"?
Update: In response to anon's comment, let me be very concrete. Suppose the Fed opens a window, somewhere on US soil, and posts a notice saying "we will buy unlimited quantities of yuan currency, bonds (or even good quality commercial paper?) at a price of X, no questions asked". Where X is above the current exchange rate set in China. What would happen? (One thing that won't happen is that China would threaten to nullify that currency or bonds, because a moment's reflection would convince China that that's a war they would definitely lose!)