Nov. 12 (Bloomberg) -- Canada's dollar headed toward 84 U.S. cents, the highest since August 1992, on speculation the U.S. dollar has more room to decline and the Bank of Canada will lift its target interest rate again next month.

The U.S. dollar is down against all 16 major currencies tracked by Bloomberg today. Canada's central bank is expected to raise its target on Dec. 7 to 2.75 percent, from 2.5 percent, interest-rate futures show. It also implemented quarter-point increases in September and October.

``We're in for a currency that is going to be hovering close to current levels for a while,'' said Marc Levesque, chief strategist of foreign exchange and fixed-income research in Toronto for TD Securities, a unit of Canada's second-biggest bank. The Canadian dollar could next reach 87 U.S. cents in coming months, he said.

Canada's dollar rose 0.4 percent to 83.92 U.S. cents at 8:13 a.m. in Toronto, from 83.61 cents late yesterday. One U.S. dollar bought C$1.1916. Canada's currency reached 84.01 cents, a 12-year high, on Nov. 8. It has closed above 83 cents for the past six days.

Yesterday, the Investment Dealers Association recommended a close to bond-market trading in observance of Remembrance Day. The Toronto Stock Exchange was open.

The currency has climbed due to ``the Bank of Canada telling this very hawkish story,'' Levesque said.

Canada's currency has closed above 80 cents every day since Oct. 19, when the Bank of Canada last raised its target rate, to 2.50 percent. Policy makers lifted the rate for the first time in 17 months on Sept. 8, to 2.25 percent from 2 percent.

To contact the reporter on this story: Sangeetha Ramaswamy in New York at sramaswamy3@bloomberg.net.

Last Updated: November 12, 2004 08:22 EST