Although the US dollar showed signs of weakness this Monday, the decline may not be too deep. The key lies in the overall stability of the US bond yield curve - the 10-year US bond yield is currently hovering around 4.16%, which has shielded the dollar from significant downward pressure.

As the end of the year approaches, liquidity in the foreign exchange and bond markets is clearly shrinking, which can easily lead to short-term volatility. There are no significant US economic data releases on Monday, and trading sentiment is somewhat lukewarm. However, investors are now gearing up, ready to welcome the data deluge on Tuesday - with US GDP and durable goods orders data set to be released. Whether these two data points can set the tone for the bond market and the direction of the dollar is what the market is waiting to see. In an environment where liquidity is thinning, the impact of such key data will be more pronounced.