JOHANNESBURG: South Africa's rand hit two-week lows early on Thursday, extending losses clocked in the previous session as a drop in July retail sales added to evidence that the economy got off to a shaky start in the third quarter.

At 0607 GMT, the rand traded at 14.4950 against the dollar, 0.6% weaker than its previous close and trading at its weakest since Sept. 1.

Data on Wednesday showed retail sales contracted 0.8% year on year in July and by 11.2% month on month following riots and tight COVID-19 restrictions.

This followed poor July manufacturing figures last week.

Markets focus is now on next week's South Africa's central bank interest rates decision and the Federal Reserve policy meeting for indications on how soon the U.S central bank will start to taper stimulus.

The Federal Open Market Committee's (FOMC) two-day policy meeting ending Sept. 22 should provide some clarity on the outlook for both tapering and eventual interest rate hikes.

South Africa's rand steadies after tumbling on violent protests

Riskier currencies, such as the rand, thrive on U.S. interest rates remaining low because they benefit from the interest rate differential that increases their appeal for so-called carry trade, in which investors borrow in a low-yielding currency to invest in higher-yielding assets.

The South African Reserve Bank monetary policy committee will announce its interest rate decision on Sept. 23.

Government bonds also weakened in early deals, with the yield on the instrument due in 2030 up 3 basis points to 8.965%.