Oil reversed a decline as China’s central bank set the yuan fixing stronger than expected, calming investors after the U.S. escalated the trade war by labeling the Asian nation a currency manipulator.

Futures in New York rose as much as 0.9% after being down as much as 1.8% earlier. China’s currency fixing was weaker than 7 per dollar, suggesting officials want to slow the pace of declines in the yuan. The U.S. Treasury Department made the manipulator determination Monday after Beijing allowed the yuan to weaken to the lowest level in more than a decade.

While the yuan fix provided some relief to investors, the world’s two largest economies are still locked in a tit-for-tat spiral with no end in sight. That’s pushed oil down more than 6% this month and eclipsed the threat of supply disruptions from the Middle East. Iran could step up its operations against tankers passing through the Strait of Hormuz, the world’s most important oil chokepoint, Foreign Minister Javad Zarif said in Tehran on Monday.

“The U.S.-China trade war is worsening in every conceivable way,” said Satoru Yoshida, a commodities analyst at Rakuten Securities Inc. in Tokyo. “Even if tensions ease in one area such as tariffs, sanctions on companies or currencies, they may find another point of conflict.”

West Texas Intermediate oil for September delivery rose 35 cents, or 0.6%, to $55.04 a barrel on the New York Mercantile Exchange as of 10:10 a.m. in Singapore. The contract fell 1.7% on Monday.

Brent for October settlement climbed 48 cents, or 0.8%, to $60.29 a barrel on the London-based ICE (NYSE:ICE) Futures Europe Exchange. It slumped 3.4% on Monday to the lowest level since mid-January. The contract traded at a premium of $5.35 to WTI for the same month