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The yuan took its largest one-day tumble in two years Friday before recovering, the latest sign that investors are struggling to get a grip on the trade clash between the U.S. and China and the uncertainty it is creating in financial markets.

China’s central bank set the yuan 0.9% lower against the dollar early Friday, the largest decline in the so-called daily fixing since 2016. The yuan’s decline extended a three-month pullback, a shift drawing attention on Wall Street due to concerns that China could unsettle markets and...

 

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