The Federal Reserve has set U.S. interest rates "in the right neighborhood," but will watch how the economy reacts to factors like the trade war, James Bullard, a key member of the central bank policy board, told AFP on Tuesday.

European stock markets recovered a bit Tuesday and Asian indices pared back heavy losses following a rout on Wall Street as investors fretted over the US-China trade war.

China allowed its yuan to fall further Tuesday and accused Washington of damaging the global economy, fueling fears about increasing damage from their trade war.

The yuan declined to 7.0562 to the U.S. dollar before strengthening to 7.0297 in the afternoon. That came a day after Beijing sent financial markets tumbling by allowing the currency to fall to an 11-year low, breaking through the politically sensitive level of seven to the dollar.

Japanese automakers saw sales in South Korea slump last month, industry data showed Monday, as President Moon Jae-in thanked his citizens for responding to the intensifying trade dispute with "one heart".

The chief of Fiat Chrysler remains open to the possibility of resuming merger talks with France's Renault, months after talks between the two automakers aimed at forging an industry powerhouse broke down, according to an interview published Monday.

HSBC on Monday announced the shock exit of chief executive John Flint, but denied talk of a management split as it also axed 4,000 jobs and warned of dark clouds on the horizon.

The Chinese yuan fell to its lowest level against the dollar since August 2010 in morning trade on Monday, fuelling speculation that Beijing is allowing currency depreciation to counter threatened US tariffs.

The grounding of the 737 MAX for more than four months after two deadly accidents has tarnished Boeing's reputation, but it still has the confidence of US policymakers.

U.S. President Donald Trump defended Saturday his hardline trade policy against China, arguing that the tariffs he imposed are bringing in "billions" from the Beijing government.

Wine connoisseurs talk about needing "a nose" to assess the quality of a vintage. President Donald Trump just uses his eyes.