The supply of dollars is falling as the U.S. current account deficit improves.

Because the major currencies are free-floating, prices are determined in the market based on the global supply and demand for a particular currency against another.

And one of the major sources of supply of U.S. dollars is through the U.S. current account deficit.

Now, the U.S. current account deficit is improving. That means less dollars in global markets, which should help the buck's value.

But here's an interesting side note: The last two times the U.S. current account deficit improved, and dollar liquidity drained from the global economy, there were major stock market crashes and recessions. Will the same thing happen this time around?