Forex Today: Market froth falls off, dollar ready to rock on all-important Non-Farm Payrolls

Here is what you need to know on Friday, September 4:

Stocks markets finally endured a significant downward correction led by tech stocks. The US dollar has stabilized after staging a recovery and ahead of August's Non-Farm Payrolls, which is set to show a slower recovery. 

Technology stocks led a long-awaited sell-off in US stocks, with the S&) 500 closing 3.5% lower after rising 60% from the bottom. Apart from profit-taking, some cite the deadlock in fiscal stimulus talks and also concerns that the elections would result in a constitutional crisis. 

Non-Farm Payrolls: Job restoration is slowing down, but at what pace? The economic calendar is pointing to an increase of 1.4 million jobs in August in comparison to 1.763 million in July. The unemployment rate is set to drop from 10.2% to 9.8%. The ISM Services Purchasing Managers' Index showed robust growth but weakness in the employment component, echoing the Manufacturing PMI. 

See: 

• Nonfarm Payrolls Preview: Fed’s policy shift to introduce vital noise
• Non-Farm Payrolls August Preview: US dollar is waiting for good news

Gold has been consolidating its losses but was not carried lower with stocks and trades around $1,940 ahead of the NFP.

Canada also publishes its labor figures, and an increase of 275,000 positions is on the cards, slower than 418,500 in July. USD/CAD is trading above 1.31 amid a climbdown in oil prices. WTI is trading closer to $40 after topping $43 last week.

See Canadian Jobs Preview: Sub 10% unemployment rate could trigger loonie's next leap

Europe: France and Spain are mulling extending their furlough schemes as both countries are struggling with a surge in coronavirus cases. Eurozone retail sales disappointed with a drop in July. EUR/USD has stabilized around 1.1850.

Brexit: Apart from the lack of progress in talks between the EU and the UK, Britain is also behind in preparations for the day after the transition period expires. That adds to pressures on the pound. GBP/USD is trading below 1.33, consolidating its losses. Markit's Construction PMI is eyed.

AUD/USD is trading below 0.73, far off the highs amid the greenback comeback. Australian retail sales increased by 3.2% in July according to the final read. 

Cryptocurrencies have been extending their losses, with Bitcoin losing the $11,000 level, Ethereum, falling under $400, and XRP battling the $0.25 level. 

More What is behind the greenback comeback? Not only the NFP buildup