The dollar hit a seven-month high against a basket of currencies on Wednesday as investors thought U.S. consumer inflation data due later would reinforce expectations interest rates there are set to rise steadily. Traders said the dollar was also benefiting from an unwinding of dollar-funded carry trades after recent hedge fund losses and credit market turmoil. The April consumer price index is expected to rise 0.4 percent after increasing 0.6 percent in the previous month. Excluding volatile food and energy items, CPI is seen up 0.2 percent. The dollar rose to $1.2586 per euro close to seven-month highs. The greenback has gained more than six percent since the start of the year. Against the yen the dollar was at 107.52 , up two thirds of a percent on the day. European Commission President Jose Manuel Barroso said a "no" vote in a French referendum on a new EU constitution would be a problem for France and Europe and that it would create uncertainties that would have negative consequences for the economy.