The dollar rose against the euro and other major currencies Wednesday following a report showing an acceleration in U.S. inflation. The 12-nation euro bought $1.2301 in early European trading -- down from $1.2346 in New York late Tuesday. The British pound fell to $1.8036 from $1.8075 The dollar also rose against the Japanese yen, climbing to 109.84 from 109.50 yen. Traders said a drop in Japanese stocks hurt the yen and some investors are reluctant to place big bets on the yen before Japan's Sept. 11 parliamentary elections. The U.S. Labor Department said Tuesday its closely watched consumer price index rose 0.5 percent in July, the biggest increase in three months, fueled by higher energy prices. The report underscores expectations the U.S. Federal Reserve will continue to raise interest rates, making some U.S. securities more attractive and boosting demand for dollars. The yen has been supported by recent signs of economic strength in Japan, as well as confidence in Prime Minister Junichiro Koizumi's leadership amid recent political upheaval