The dollar fell sharply against most European currencies Wednesday, hurt by a rally in the mark and new evidence of benign U.S. inflation that dimmed the prospect of higher American interest rates.

But the dollar ended higher against the yen and hit the strongest level against the pound in nearly five months.

The main focus in foreign-exchange trading was a big runup in the mark, not only on pound weakness but continuing speculation that the European Monetary Union single-currency planned for 1999 could be postponed.

Exchange Currency in Dollars Dollar in foreign currency

Canada .7338 1.3627

France .1751 5.7100

Germany .5906 1.6932

Great Britain 1.5992 .6253

Italy .000593 1687.50

Japan .008174 122.34

Mexico .125549 7.9650