Dollar Drops to 3-Year Lows … And AMD’s Latest AI Reveal 6/12/25

0:02Live from the Nanzac Market Side and the heart of New York City's Times Square. This is Fast Money. Here's what's on tap tonight. Dollar doldrums. The greenback falling to more than three-year lows as tensions with Iran flare up and a trade deal with China remains on shaky ground. The implications for the economy and the markets and more troubles for Boeing. Shares of the aerospace giant dropping after the latest deadly crash in India. What does the reaction say about the state of the stock? Plus, a pair of old-school tech stocks hitting new highs. We're watching earnings from Adobe and RH and how AI is changing the ad tech game.

0:34We'll talk to the CEO of Taboola about the future of the space. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan, and Steve Grasso. We begin with that staggering drop in the dollar. The dollar index trading at its lowest level since April 2022. Levels even more stark against the euro and the pound. The latest moves coming as uncertainty over trade policy leads foreign investors to reduce their exposure to the greenback. Treasury is following suit with the yield on the 10-year at its lowest level in over a month. So what does this move away?

1:04from the traditional safe haven asset, tell you about where the market is heading? Tim. Well, if they're vacating Treasury assets, you'd think yields would be higher. So, I mean, I think some of that is somewhat conflicting. But I think the confluence of ECB last week getting out there saying, hey, I think we're done in the short term, even though inflation is a little sticky. It's kind of not moving anywhere. And I think at this point, their dovishness relative to the Fed is yesterday's news. I think post-CPI this week here and some Fed commentary and some sense that the markets are pricing in at least now two cuts before now and the end of the year and possibly a bunch next year.

1:41You've got central bank differentials, which are really, I think, putting the dollar in a place where the dollar could weaken that much more. And I think often that is really the number one driver for the Dixie, which is that euro basket cross and then you have the yen. So I think it's a combination of that. I think some of it is trade tariffs in the U.S. economy. I think is growth differentials between us and Europe that have contracted. In fact, you could make an argument in Q1 GDP, which is always backward looking, but that actually the EU on a relative basis was stronger than the U.S. I think what it means for markets is it actually could be very good.

2:17I think it's not bad for U.S. multinationals. We always talk about that number. I think it's certainly very good for industrials. I think it's great for commodities, especially industrial metals. And I think these are trades that were kind of picking up steam anyway. And I don't think it really hurts technology because I think a lot of these technology companies are well insulated from the inflationary forces of a weak good dollar. So net net. I like it. Or should we should we question, you know, doesn't it matter why the dollar is moving lower? And at what point will that outweigh the dollar weakness being a good thing for multinationals?

2:47Well, I don't know. We were talking a little bit about this before that. And Tim brought it up. It's a little perplexing to me that yields are lower. So, right, Treasury is stronger and the dollar lower. So, I don't know, maybe it is. It's not foreign outfills. What? I don't think it's foreign. I think what you're saying is. Yeah, maybe it's a lot of Treasuries as well and yields are higher. And that would make more sense. So, I'm not really sure as to, you know, when the dollar was going the other way and you would have the multinationals have a hit when they talk about constant currency earnings, I always sort of dismissed it then and I'll dismiss it now that, you know.

3:23Who cares? He brings what? Who cares? Who cares that they made it on dollars? I'm sorry. I thought maybe that's what you were saying, because I don't typically care. I mean, FX. That would have been rude if he said it directly at you. That's all right. No, I just I don't really like that as, oh, our earnings are better because, you know, the FX was better. Yeah. I just think that Tim mentioned the growth differentials. We've seen this now twice in the last week and a half, though. We saw OECD and we saw the World Bank this this year. And it's interesting when you think about the uncertainty here and if you talk about, you know, foreign flight of our assets, I mean, you really are seeing pressure on our growth, at least the expectations of that relative to these other countries that we put these tariffs on.

4:04And the idea that you might have a protracted trade situation, it really does. I mean, the idea of capital flight makes perfect sense. It's kind of the opposite of the carry trade that we've seen unwind here and there. Right. Like I think folks are looking for higher yielding places other than the U.S., especially if you think that growth is going to be weaker here than abroad. So, I mean, to me, as far as the yield thing, you know, when you think about quantitative easing, what are they trying to do? Normally, they're trying to get yields down and trying to get the dollar down. And I think that that discrepancy that we've seen over the last two months, maybe it's coming back more in vogue or more the way it should be doing.

4:40But if you do see that stuff going the opposite way, I don't know how you would kind of take what the equity market is doing, climbing back towards those prior highs and not be more concerned about what's going on in the dollar and then that kind of disconnect. Because if you have a weak dollar and you have stronger yields and then you're starting to price in slower growth, that's not favorable to equities, no matter what you think a good dollar or a soft dollar is for S &P earnings. Although the backdrop right now is we have a weaker dollar. We've got all time yields and all time highs. And so the higher yield part is not really working out here.

5:13We've managed to stay in a range, and we're lower today. Yeah, I agree with how Tim laid it out. You have the market at all-time highs. It's a tailwind for multinationals. There's zero correlation to dollar strength or weakness with the overall market. Zero. Historical. Historical. And when you look at the dollar share as reserve currency, it was at 70 % back in the 2000s. So it's been dropping because there's a diversification away from the dollar. The eurozone or the euro will never overtake the dollar as reserve currency. Two fragmented. 20 different countries, 20 different central banks, along with the ECB.

5:53No depth of market the way that we have here. So will it continue? And by the way, the last couple of years, reserve currency of the euro has moved sideways. ways we've been coming down because of diversification to all of them. So no one really sticks out. I think the euro will rally a little more. The dollar might sell off more. Foreign holding of U.S. debt is at all time highs in March 2025. So to Tim's point, no exodus from treasuries. It was up 12 percent year over year. Foreign holding of U.S. debt is at$9 trillion currently, highest ever. I think, you know, ultimately, I don't expect erosion of the U.S.

6:37dollar reserve currency status anytime soon either. I feel like when you say never in the world of markets, I'm joking. Wait, no, no, no, one little snippet. I do believe the reserve currency will continue to fall the same way it fell from 70 % back in 2000s because just these other economies have grown and the markets are growing, so there's diversification. I just don't ever think we will be the smallest or not the smallest, the second largest reserve currency. So that reserve currency could be 40 percent and the rest of the world could divvy up the other ones. Yeah. But I think if you look at where the dollar is, guess what?

7:10We're right back to where we were pre-COVID. So if you remember, after COVID, we went down to about 88 on the Dixie. And then we really went into this period where, again, the U.S. Central Bank was extremely aggressive. It took a while. But ultimately, that trend took us back to where we were and we know where we've come back from. So if you look at a 10-year range in the dollar, we're right back in the middle. If you want to look at a range where I think we start to move, and this is always what we say is how quickly and how fast is the velocity of the move is when you should really be concerned.

7:35This has been a pretty quick move. But again, I don't think the real level to be worried about isn't, I think it's all the way down at 88 on the Dixie. I do think it's a case where some of the themes we're talking about, though, foreign investors and what they're doing with their money and how they view investing in the U.S. I think the most important thing as it relates to the dollar and why the euro actually can have some strength if you are concerned, it's 20 nations that never see eye to eye is because they have it's a current account surplus currency. In other words, Europe has a current account.

8:03So we don't need to get too deep into this. But this is the whole story of, hey, the U.S. should actually it's it's it's a privilege to be running a big deficit because it means people are you're at. They're actually financing our economy, whereas in Europe, they are current account and they're one of the best credits out there. Germany is actually the largest creditor to the world at this point. They just overtook Japan. So these things are all relevant. But back to markets. Yeah, I mean, I think you're right. You've had periods where the markets run really fast in a weak dollar. You've had periods where a strong dollar has been great for us.

8:34I think it really is the dynamics around here. But but everything that's the backdrop of what's been going on with Trump tariff policy and whether foreign flows are coming in and out, I think is relevant. It's just not relevant tomorrow. All right. For more on dollar weakness, let's bring in Kathy Lean, head of FX Strategy at BK Asset Management. Kathy, great to have you with us. What do you think is the number one driver of the dollar's move lower, Kathy? And what do you make of the seeming sort of discrepancy between the extreme dollar weakness that we've seen recently and the relative stability in the Treasury market?

9:05So the question really should be, what's the driver of the near-term sell-off in the dollar versus the sell-off that we've seen over the past couple of months? Because I think that the longer term trends of the dollar and the factors that have been driving it lower have been both cyclical and structural changes, all of which, you know, Tim and Steve pointed out very, very well. Now, in terms of the very recent decline and acceleration and the weakness, that's completely driven by the unexpected softness of the inflation data. As we saw in the Fed fund futures, they shifted dramatically after the inflation report as people realized that we could get a minimum, well, probably a two and a minimum of two and more aggressive easing in terms of rate cuts from the Federal Reserve next year.

9:47So I think, you know, there's a near term force that's driving it lower. But the longer term factors such as slowing growth, slowing inflation, the current account deficit that you just pointed out, along with, you know, reserve diversification, as small as it may be, is happening. And also, you know, there's a lot of talk. And you just asked me, Melissa, about how this record bonds holdings. But, you know, we are actually seeing foreigners, sorry, Japanese investors sell the largest amount of foreign equities in the month of May since 2022. So, you know, we are seeing reduction in demand across the globe, perhaps in different assets.

10:26So I think all of that is contributing to dollar weakness. Where do you see the dollar going, Kathy? So I think, you know, for now, I think the dollar downtrend remains intact. You know, the latest move has been quite significant in terms of slope. So we could see a little bit of stabilization. But don't forget, next week we have the U.S. retail sales report. We have the Federal Reserve rate decision. Very important news events for the dollar. And we're also going to possibly get the details on the unilateral tariffs from the Trump administration. So there's a lot of factors that can cause some sort of near-term safe haven bid in the dollar, particularly if the Fed resists rate cut calls.

11:03But I think the overall trend is still lower because it's inevitable that they're going to have to push the go button and rate cuts in Q4. Kathy, it's Tim. Thanks for joining us. Are we paying too much attention to the yen? You know, of all the central banks out there, BOJ seems to be the one that's been the most unpredictable and maybe unconventional. But yen volatility is something we talk about a lot. Are we paying too much attention? Well, it depends if you're a yen trader or not, right? I think a lot of people do trade yen, and they pay a lot of attention to it. I play one on TV sometimes.

11:33It's on the headlines because they had such a dramatic shift in their central bank policy this year. Part of it is because tariffs kind of forced their hands in not raising interest rates and changed that dynamic. But I think there's a lot of very interesting trades in dollar-yen, and that volatility is a lot of opportunity for traders. All right, Kathy, we're going to leave it there. Thanks so much for your insights today. Kathy Lean, BK Asset Management. Obviously, the weakness in the dollar has huge implications for MIGA and the like. Yes. And I think the MIGA trade's been alive and well. And if you look at the MSCI All World XUS, it was up about 180 basis points on a five-day look back, outperforming.

12:16And I do think that for the most part, especially if you look at more emerging economies, I think the dollar strength at times historically has been a really big, big deal. I think ultimately, though, MIGA is somewhat getting the benefit from the fact is that the Germans are cutting bilateral deals with the Chinese. The fact that it's country by country. And I think people are figuring out ways around. But I think MIGA trade, as much as anything, has been a 15-year underperformance that's now started to reverse. That's why I think you've got a lot of runway here. Yeah, I just want to tell the viewer we're going to get back to the stock market really quickly.

12:50I haven't thought much of this. This all impacts the stock market. I'm just saying. I don't want to lose you here, people. The only thing I'm going to say is that maybe it's really inflationary, the weak dollar, and yields coming down, that sort of thing. Who knows? And you saw what crude oil has done, and maybe there's some geopolitics to that, but I definitely think it's something that would be. But you're talking stocks. Well, we're going to go to the XLE. So Exxon and the XLE, they've been stuck in this range, and I don't even know what you did. Okay, go ahead. We're going to talk stocks. I mean, all of this is really, everything we do is related to the stock market.

13:21I take offense to that. The tech trade here going old school today. We're switching gears. IBM and Oracle both hitting all-time highs during the session. Big blue ending the day slightly lower, but still at more than 8 % this month. Earlier this week, it announced plans for a large-scale, fault-tolerant quantum computer called Quantum Starling. Oracle, meantime, crushing earnings expectations after the bell last night, saying it sees more than 70 % growth in cloud infrastructure for fiscal year 2026. It's like a built-in would-you-rather here, Steve. IBM or Oracle? Yeah, so IBM years ago when we did our secular shorts, that was my secular short, and they never got enough credit.

13:58They were the original AI company with Watson. Now I think they're taking the bull by the horns, and if you look at Quantum, I think they're not going to miss out on this twice. For me, I think I would go with Oracle over IBM on the would-you-rather. I listen to the commercials. They offer twice as much storage for half the price on OCI. So, you know, when you look at their competitors, AWS or Microsoft, they outcompete their competitors. User growth, enterprise growth, net income margins, all through the roof with Oracle. I mean, the call was very, very, very bullish. They do tend to have more positive calls, right?

14:37Yes. Right. But, I mean, the amount of demand there. So we've seen a few times now this sort of support for the ongoing story of AI and the development and all of the infrastructure demand. And that was not even counting the Stargate, which who knows what will happen there. But so Oracle, impressive. I hoped Dell would do better off the heels of it, but it didn't. I'd be careful with Oracle here. You know, Microsoft's been a huge customer. They've obviously been scurrying for capacity when you think of these clouds. I mean, this is not one that, you know, this is a distant five or six, if you think about it, to Azure and AWS and that sort of thing.

15:12So at some point, demand for this excess capacity is going to come in. And I like maybe as they build out their own data centers and this is what all of these hyperscalers are doing. I wouldn't want to be the fourth or fifth player who's actually kind of, you know, sopping up some of that extra demand in the period of this big build out. So to me, like I look at a breakout like that to new all time highs and it seems a little unhealthy to me. and it doesn't actually scream bullish to me. Well, I think the breadth of the AI build out, which, again, Karen, I mean, they're very, very optimistic on these calls, and they have been, and they've done that in the past, and I think the market has responded.

15:51Until then, the market, first of all, runs out of gas on the charts. I mean, it looks like it's broken through those all-time highs decidedly, and I heard Carter earlier in the week say that, you know, more than three and a half percent through a resistance level is actually time to maybe beam by in a breakout. I don't know. But I do think that Oracle on a P.E., we talked about this yesterday in the after hours and the stocks obviously increased on the after hours move. It's not cheap. It's not cheap. But to to count Oracle out here for the last five years has been wrong. To count them out for the last two years has been almost good to put you out of out of a job.

16:25Coming up, we've got a ton of after hours action to bring you, including Adobe. We'll dig into the software giant's results, see how it's faring in the AI age. But first, AMD takes center stage at its own AI event. All the juicy announcements from today's big conference. That's next.

16:40This is Fast Money with Melissa Lee, right here on CNBC.

16:53Welcome back to Fast Money. Boeing shares dropping nearly 5 % following the tragic crash of an Air India jet just after takeoff in western India. The incident killing more than 200 passengers and crew members on the London-bound plane, as well as dozens of people on the ground. The exact causes of the crashes are still unknown. It marks the first involving a Boeing 787 Dreamliner. NBC News' Matt Bodnar joins us now from London, Gatwick Airport with the very latest. Matt. Thank you. Well, really an astonishingly positive development in this deeply tragic story. Indian media and our international partner Sky News have confirmed that there is one accounted for survivor at this time.

17:33He is a British national, a man. We believe that he's about 40 years old. The Hindustan Times, meanwhile, has spoken to a man of the same name, of the same age, who had a ticket in that name, and quote him as saying, quote, 30 seconds after takeoff, there was a loud noise and then the plane crashed. It all happened so quickly. The newspaper says that he is being treated now for injuries sustained to his chest, eyes and feet. Now, I think his account of what happened, of course, is going to be very important in the hours, days, weeks. Moving forward as the official investigation starts to look at what happened here today and share some of its findings.

18:10As things stand, we have heard nothing official from investigators, though aviation experts working with NBC News as well as commenting elsewhere have started to hone in potentially on signs leading to some speculation the flaps were not fully deployed, which could have led to this crash, though it is important to emphasize there is no official information at this time suggesting any cause one way or another. Matt Bodnar, NBC News, London. All right, our thanks to Matt. And again, I just want to underscore the fact that we do not know what the cause of this crash is, but I think RBC put it very well in its note today on this incident, and that is that this brings in the uncertainty of this whole thing.

18:50It's an overhang on the stock. And you have to appreciate that when it comes to the stock, which had just seemed to be emerging from all of its difficulties. We were just talking about this earlier this week. The company was saying that production will be increased by the end of the week. The Paris Air Show was going to come in. Things were looking up for this company. It's the B in your acronym. So, yeah. So, I mean, of course, the tragedy of it is the most important thing. But, you know, I saw it trading down a bunch this morning. And, you know, so we don't know the cause. If you're Boeing, you have to hope that it's pilot error or some mechanical maintenance, a maintenance mechanical issue.

19:29If it is a structural issue, that is like a very bad case scenario for Boeing. So we just don't know at this point. I don't know how long it will take either. So I haven't done anything in the stock. I actually would feel sort of bad trading around in the stock, you know. But it is, I'm sure, tremendously frustrating and obviously so sad for everyone related. Yeah, I actually nibbled on a little of the stock yesterday. I added to a position that felt really good. I think a horrible tragedy. I mean, just horrible tragedy. And I think related to just what this means for leaving aside sentiment for the stock and an overhang.

20:12I don't think this affects the production ramp unless there's something decidedly negative that's determined in the short to medium term. So I think you're a little worried about the feedback loop as it might affect the 777 certification. And I think that's something to think about. But right now, I don't know that there's a fundamental impact on the company. And some of those deliveries and the order book and the things that were part of the bull story a week ago are still there. It just, again, there's still so much unknown here. And it's another tragedy. We should note, too, that this plane had been in the works or not in the works, but working as a working plane for 10 years.

20:54So it's been in service for quite some time at this point. And this is the first fatal plane crash involving a Dreamliner specific. And we don't know how it's been maintained. We don't know whose fault it is. We don't know any of these things. Boeing, when you look at it for five years, has been in a trading range. $130,$280. Pretty much right in the middle of that trading range. So horrific accident. 40 % of the revenues come from the U.S. government. I think you're okay to nibble on the stock. And we don't know what the cause of the accident was. ultimately this is not a terrible place to buy the stock.

21:30Kamiap, Adobe and RH on the move after reporting earnings. The numbers behind the action next. Plus, Chime Financial soaring in its debut, opening well above its IPO price. What to make of the action in this consumer finance name? You're watching Fast Money Live from the Nasdaq Markets. I did Times Square back right after this.

21:58Welcome back to Fast Money. We've got an earnings alert on Adobe. The stock is giving up early gains despite a beat on the top and the bottom line. CNBC's Pippa Stevens has got details on the quarter. Pippa. Hey, Melissa. So Adobe did see record revenue in the second quarter with digital media and digital experience revenue coming in ahead of expectations. Guidance also exceeding estimates with Adobe raising its full year revenue and EPS targets. Now uptake in monetization of Firefly, the company's AI technology, was top of mind with the company saying on the call, just now that the Firefly app is attracting new users to the Adobe franchise and that first-time subscribers grew 30 percent quarter over quarter with paid subscriptions nearly doubling.

22:36The company added that combined monthly active users across Acrobat and Express climbed 25 percent year over year. Still, Evercore ISI is saying the guide likely keeps shares in a range and that until there is a better sense that the new pricing structure and Firefly is driving incremental net new annual recurring revenue, most investors will remain in wait-and-see mode. Melissa? All right, Pippa, thank you. Pippa Stevens. Dan, what do you think? Yeah, they're going to wait and wait-and-see mode because there's so much competing stuff coming out of there, these image generators, and they're coming from everywhere.