(Updates prices, adds more comment)
* Aussie buoyed by solid outlook for local business investment
* Dollar index dips, eyes on data including Q1 GDP breakdown
* Euro firmer but still mired near a 3-month trough
* Sterling also steadies around $1.67 after slide
By Patrick Graham
LONDON, May 29 (Reuters) - The Australian dollar jumped more than half a percent on Thursday as investors considered whether this week's major currency moves - a rally for the dollar and retreats for the euro and sterling - had further to run.
A holiday in much of Europe thinned out trading, and analysts said a second estimate of U.S. second-quarter growth might prompt more substantive moves among the other majors.
The euro has fallen to a three-month low this week as expectations solidified for a multi-pronged attack on monetary policy by the European Central Bank next week. It was holding steady just above support at $1.3583 on Thursday.
The Aussie was driven higher by data on business investment which showed spending plans for 2014/15 have jumped to A$137 billion from an earlier estimate of A$125 billion, overshadowing a dip in such spending in the first quarter.
"The interesting thing about the Australian economy is that it is showing some signs of divergence away from China," said Christian Lawrence, a currency strategist at Rabobank in London.
"There is an increasing feeling that Australia can weather the slowdown in China better than people previously thought."
By midday in Europe, the Aussie was up 0.65 percent at $0.9296. The currency has held between longer-term support around $0.92 and its 21-day moving average at $0.93 for the past two weeks. Dealers said it may struggle to break out of that range.
Both the pound and the euro recovered a foothold after falling through barriers respectively at $1.36 and $1.67 in the previous session.
For sterling, one of the past year's big winners, the fall this week has led some to wonder whether its rally against the dollar has peaked. Thursday's pause underlined the fact that the jury, for many, is still out.
Citibank analyst Josh O'Byrne said the pound might in particular have room to recover against the euro.
"The pound selloff could be driven by temporary factors like month-end corporate hedging as well as unwinding of bets on favourable M&A flows," he said.
"While some cautiousness may be warranted ahead of the mortgage lending data next Monday, we believe that (the) recent move higher in EURGBP could offer an interesting selling opportunity ahead of the ECB meeting next week."
The pound traded marginally higher at $1.6703. Against the euro it gained 0.2 percent to 81.45 pence per euro .
The dollar index fell around 0.2 percent to 80.435 drifting lower from Wednesday's two-month high of 80.581.
The U.S. currency's gains in the past week have come in spite of another slide in U.S. Treasury yields, but another 5-basis point dip in 10-year rates on Wednesday were enough to halt the rally.
Still, expectations of policy action from the ECB have been mounting - a key reason for the recent underperformance in the euro. A Reuters poll of 48 economists showed a clear majority expect the ECB to cut its deposit rate into negative territory next week, a view reinforced for many in the market by policymakers' comments this week.
"The bias is lower (for the euro)," said Rich Kelly, head of European FX and rates research at TD Securities in London. "My only worry is that a lot is priced in and that the ECB will struggle to live up to those expectations next week." (Editing by Hugh Lawson)