Currency

Facing mounting economic tensions with the United States, the Chinese government said yesterday that it would loosen its currency's link to the U.S. dollar, a move that could give American manufacturers some relief in competing with low-wage Chinese factories but also could push U.S. consumer prices higher. U.S. companies and politicians have complained that the Chinese government deliberately kept the value of its currency, the yuan, low in relation to the U.S. dollar so it could more easily export goods into the lucrative U.S. market.

The threat of a trade war with China diminished last week when two U.S. senators agreed to postpone a pending vote on legislation that would impose a 27.5 percent tax on all Chinese-made products unless China revalued its currency. Sens. Lindsey Graham (R., S.C.) and Charles Schumer (D., N.Y.) announced their decision after a closed-door meeting Thursday on Capitol Hill with Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow. "They have convinced us that the likelihood of real progress with China on currency revaluation is very real and could occur in a very short while, the next few months," Schumer told reporters.

Lou Ann Holderness shops at Wal-Mart for the low prices. Like millions of Americans, she is indifferent to accusations that China manipulates its currency to make Chinese-produced goods sold by U.S. retailers artificially cheap. "I just buy. Isn't that terrible?" she said sheepishly, heading into a Wal-Mart store in this Washington suburb. "I keep an eye out for bargains. " But the Bush administration and Congress may take the bargain out of such bargain shopping. Congress is threatening to impose trade penalties of up to 27.5 percent on the price of everything China exports to the United States unless Beijing revalues its currency.

Global economic experts meeting in Switzerland this week discounted the rumored impending death of the dollar as the world's anchor currency, saying any wholesale stampede away from the greenback was highly unlikely. Many analysts have issued worst-case scenarios warning that foreign investors and governments, soured by soaring U.S. federal budget and trade deficits, might dump their dollar assets and shift their capital into euros, yen or other currencies. At the extreme, such a trend could trigger a collapse of the dollar and perhaps even the global financial system.

The U.S. dollar slid to a new low yesterday against the euro, which rose to $1.3172 - breaking a day-old record as jittery markets kept up pressure on the U.S. currency. It was the seventh time this month the dollar has slid to a new low against the euro. The recent rally for the euro has taken it from $1.20 about two months ago, driven by concerns over the U.S. trade and budget deficits. Yesterday's trading brought the euro up from $1.3086 on Tuesday, according to EBS, an electronic currency-dealing system.

GlaxoSmithKline P.L.C. yesterday reported a 9 percent drop in earnings in the third quarter, citing generic competition for its antidepressants Paxil and Wellbutrin and an unfavorable foreign-currency exchange against the dollar. Europe's biggest maker of prescription drugs, with a U.S. headquarters in Philadelphia, reiterated that full-year 2004 earnings would at least match 2003, with growth returning in the fourth quarter this year. The company reports earnings in British pounds.

Stack's will auction parts five and six of the massive John J. Ford Jr. collection on Tuesday in Le Parker Meridien Hotel in New York City. Dispersing this collection has sent clouds of top-of-the-line coins into other collections and into dealers' (locked) showcases. The auction will start at 6:30 p.m. with an array of colonial coins, followed by medals of all stripes. The second part will offer Ford's pre-currency documents and financial paper. Some War of 1812 notes, continental currency sheets, many sheets of obsolete currency, rare Mormon currency, and other obsolete notes will be included.

Could Ben Franklin, just shy of his 300th birthday, lose his place on the $100 bill? One of the ideas bandied about to memorialize Ronald Reagan is to put the former president's portrait on the C-note, where Philadelphia's most famous citizen has smiled benignly since 1914. Already booted off the half-dollar coin to make way for John F. Kennedy in 1964, Franklin would lose his last prominent perch in modern America if he vanished from the nation's biggest bill. The printer-inventor-philosopher-author-diplomat-founding father still retains a hold on the popular imagination and deserves to keep his place on the currency, says Walter Isaacson, author of Benjamin Franklin: An American Life, a best-selling 2003 biography.

In this brave new century, capitalism could finally gain a foothold in the government's business of making money. Really making money - printing currency and striking coins. The opportunity could come should the Supreme Court ever erase the motto "In God We Trust" from in front of Jefferson's nose or from the backside of currency. The court already has been asked to strike "one nation under God" from the Pledge of Allegiance - and if it does, civil-liberties groups have threatened to go after the currency motto as well.

Nicola Diver found love in her hometown of Donegal, Ireland. But finding the perfect wedding dress - a Mon Cheri in spun gold, size 12, Style 14266 - would take traveling the globe. She found the dress, of all places, in Haddonfield Borough, thanks largely to the Internet and a highly favorable currency rate for foreign visitors. "It's fabulous," said Diver, 24, admiring herself in the large mirrors at Jay West bridal shop Saturday. Diver had ordered the $899 dress, designed with beaded detachable straps and an embroidered, layered skirt with a chapel train, by phone from Donegal on Jan. 8. She plunked down a $300 deposit by credit card, and hoped and prayed for the best.