S.Africa's rand hits 3-week high, stocks edge higher

JOHANNESBURG (Reuters) - South Africa's rand firmed to a three-week high against the dollar and euro on Tuesday, bolstered by strong commodity prices, while banking shares pulled Johannesburg's bourse up.

The rand continued to track dollar and metal price movements, pushing through 7.40 to the greenback as gold climbed back towards Monday's all-time high.

It was trading at 7.3850 against the dollar at 1550 GMT, 0.4 percent stronger than its previous close in New York, after touching 7.3720, its firmest level since October 21.

Traders said local importer demand for dollars had capped gains around the 7.40 level during the Johannesburg session, but that overnight trade could open up a move to 7.33.

All eyes were on the dollar and precious metal prices, with the market ignoring domestic issues, including a government minister warning of rand strength and a leadership debacle at power utility Eskom.

"If commodities keep going higher it will probably break the 7.40 level, it remains a commodity (and) weak dollar move and nothing will change that in the short term," Bidvest Bank chief dealer Ion de Vleeschauwer said.

"As long as gold keeps on rallying and the dollar remains weak the rand will remain strong."

The U.S. currency firmed but stayed near a 15-month low against major currencies while gold was above $1,100 an ounce, not far from Monday's all-time high.

Economic Development Minister Ebrahim Patel, who is close to trade unions that want a shift towards more leftist economic policy, reiterated that the strong rand hurt the economy, although he added a proposed debate on its strength may not lead to changes.