Electrical current in a completed circuit will flow whenever there is a potential (voltage) difference between two points in the circuit. The current always flows from the higher voltage to the lower voltage. So, for instance, when a bulb is connected across a battery, current will flow from the battery positive terminal through the bulb to the battery negative terminal lighting up the bulb in the process. This basic theory becomes a little more involved when there is more than one voltage source such as when a dynamo is added to the circuit.
When the engine is started and the dynamo starts to spin, it will produce an output voltage which will be proportional to it's rotational speed. As the speed increases, so does the output voltage until it eventually reaches a value greater than the battery voltage. As already stated above, current will flow from the higher voltage (the dynamo) to the lower voltage (battery) - current will flow from the dynamo into the battery thereby charging the battery.
Of course, when the engine and dynamo are stationary, the dynamo will obviously not be generating any voltage and the voltage at the dynamo output terminal will be at zero volts. This is obviously less than the battery voltage so now current will flow from the battery into the dynamo.
So current can flow in both directions in the wire between the dynamo and battery. The direction of the current flowing in that wire is easily indicated by breaking the wire and joining the two ends to the terminals on an ammeter. The ammeter will then display the current direction as either 'Charge' (current flowing from dynamo to battery) or 'Discharge' (current flowing from battery to dynamo).
In practice of course, it is not desirable to have current flowing from the battery into the dynamo as the dynamo will act as a load on the battery and, if left alone, will fairly quickly flatten the battery. To prevent this, a cut out is added which acts as a kind of 'one way' valve so that current is free to pass from dynamo to battery but is prevented from flowing from battery to dynamo.