The British pound rose sharply against all major currencies including the dollar yesterday as foreign exchange dealers reached favorably to the British government's tough new budget measure. The dollar also was lower against most other currencies.

Gold continued to lose ground, closing in Zurich at $277.125 an ounce compared with $278.625 at the end of trading Tuesday. At the later close in London, gold had weakened to $276,875an ounce from $278.375. In New York rallied to close at $279.75 an ounce, but dealers said the rise was due to short-covering and not an indication of a trend.

In Frankfurt the dollar eased to 1.909 marks at the close from 1.913 Tuesday; in Zurich to 1.729 Swiss francs from 1.372; in Paris to 4.417 francs from 4.434; in Brussels to 31.80 Belgian francs from 31.92; in Amsterdam to 2:091 guilders from 2.098; and in Milan, to 853.05 lira from 854.55.

In London the British pound was worth $2.104 compared with $2.091 Tuesday.

In Toyko, however, the dollar gained and dealers attributed its continued strength to tight supplies of dollars needed to settle accounts. It closed at 219.85 yen against219.40.