Only a month ago the dollar slumped to an all-time low against the euro and the yen.

But now, the US currency has started to strengthen - with the markets talking about a "turning point". On Wednesday, the dollar reached a six-week high against the European single currency, closing in on $1.53. The dollar climbed to a 10-week peak against the pound.

But does the dollar remain in danger? Could "the rope slip" and the world's pivotal currency still go into freefall? That would plunge America beyond recession and into depression - as inflation ballooned amid soaring import costs, forcing the Federal Reserve to raise rates in the teeth of shuddering slowdown.

A plummeting US currency would also cause chaos globally, as central banks sought to protect the value of their reserves. And after the inevitable overshoot, the currency would snap back, sending financial markets into a tailspin, and threatening a fully-blown global slump.