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Yuan Advances Most in a Week on U.S. Downgrade, Record Fixing

China’s yuan strengthened the most in a week, touching a 17-year high, as a Standard & Poor’s downgrade of the U.S. debt rating fueled speculation China will rein in dollar purchases used to limit appreciation.

The People’s Bank of China raised its reference rate for the currency by the most since November after S&P cut America’s top credit rating by one level to AA+ on Aug. 5. The U.S. should avoid letting its currency weaken or taking fresh monetary steps that may worsen the dollar’s depreciation, Xinhua News Agency said yesterday in a commentary. China is the biggest foreign owner of Treasuries, holding $1.16 trillion of the securities as of May, U.S. Treasury Department data show.