In a letter to Luxembourg premier Jean-Claude Juncker -- who also leads the panel of finance ministers of the 13 nations that share the euro as a common currency -- the BusinessEurope lobby said that by "having crossed $1.40 against the U.S. dollar, the euro exchange rate has reached a "pain threshold" for European companies.

It also complained the euro was appreciating too fast against the Chinese yuan and Japanese yen.

BusinessEurope, which represents companies in 33 nations, called on Juncker to launch "an active and sincere dialogue" with the United States, Japan and China to tackle the exchange rate turbulence.

The euro bought $1.4135 in late European trading, down from $1.4154 late Tuesday in New York. The British pound fell slightly to $2.0366 from $2.0411 the day before, while the dollar strengthened to purchase 116.74 Japanese yen from 115.77 in New York.

The euro hit an all-time high Monday versus the dollar of $1.4284.

Currency traders focused Wednesday on a series of reports from the U.S. for hints about future interest rate movements from the Federal Reserve, culminating with employment data on Friday, said James Hughes, an analyst with CMC Markets.

"Expectations are still that we'll see further weakness emerge," he said. "Yesterday's pending home sales data certainly showed a notable decline and presuming that this theme prevails then it's really going to force the Fed into further rate cuts before the year-end."

A higher euro makes goods from the euro zone more expensive for customers elsewhere, and cuts into manufacturers' profits if they try to keep the U.S. dollar price of products constant. While it makes U.S. exports cheaper, it cuts the spending power of Americans visiting Europe.

France's new President Nicholas Sarkozy has called for the European Central Bank to do more to dampen the euro's rise -- putting pressure on the ECB ahead of its meeting Thursday, when it is expected to hold the key rate steady at 4 percent.

Italian Prime Minister Romano Prodi also expressed concern Wednesday about the rise of the euro, but said the ECB must be allowed to operate independently.

The dollar's string of record lows recently began after the Fed cut rates last month by a larger-than-expected half percentage point to 4.75 percent.

Lower U.S. interest rates, used to jump-start the economy, can weaken its currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.

On Wednesday, the Institute for Supply Management trade group reported that the U.S. service economy, feeling the drag of the slumping housing market, expanded at a slower pace in September than in August.

Its index gauging the health of non-manufacturing industries registered at 54.8 in September, down from 55.8 in August and below the 12-month high of 60.7 reached in June.

The index, now at its lowest point since March, was in line with economists' estimates. A reading above 50 indicates economic expansion in the service sector, while one below 50 indicates contraction.

Associated Press Writer Robert Wielaard in Brussels, Belgium, contributed to this report.