US President Donald Trump has dismissed fears of a protracted trade war after China weakened the yuan and the US Treasury labelled Beijing a currency manipulator, triggering financial market turmoil and deepening anxiety about the global economy.

"Massive amounts of money from China and other parts of the world are pouring into the United States for reasons of safety, investment and interest rates! We are in a very strong position," Mr Trump tweeted.

China's central bank said on Tuesday that Washington's currency move would "severely damage international financial order and cause chaos in financial markets", while preventing a global economic recovery.

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