* Dollar index up from lowest since January 2015
* European stocks erase Tuesday's losses
* Gasoline futures continue to rise as refineries shut
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Abhinav Ramnarayan and Jemima Kelly
LONDON, Aug 30 (Reuters) - The dollar came off a 2-1/2 year low and world stocks rose on Wednesday after the United States' measured response to North Korea's missile test soothed jittery investors who turned their focus to positive economic data.
European stocks rose higher, tracking counterparts in Asia and the United States and reversing losses from the day before when investors were spooked by Pyongyang's firing of a ballistic missile over Japan.
Fears that this could trigger an aggressive response receded on Wednesday after the United Nations - in a statement drafted by the United States - condemned North Korea's latest missile launch but held back any threat of new sanctions.
Trump, who has vowed not to let North Korea develop nuclear missiles that can hit the mainland United States, said the world had received North Korea's latest message "loud and clear".
"Instead of the (U.S.) President responding to the escalation via Twitter, as has happened on many recent occasions, the White House issued an official statement to condemn the action," said IronFX analyst Charalambos Pissouros.
"This may have been interpreted by investors as a sign that the US will approach the situation in a more measured and diplomatic manner, as opposed to raining down 'fire and fury'," he said.
He was referring to U.S. President Donald Trump's remarks earlier this month that he said he would respond with "fire and fury" if North Korea persisted in threatening his country.
North Korean media reports on the launch also lacked their usual claims of technical advances, indicating the test may not have succeeded as planned.
The dollar recovered from a four-month low, rising 0.2 percent against the Japanese yen and against a basket of currencies.
The recovery in the greenback had begun during Tuesday's U.S. trading session, with data showing U.S. consumer confidence hitting a five-month high and house prices rising again.
"A series of strong economic data reminded traders and investors that the (Federal Reserve) is on course to shrinking its balance sheet and lifting rates again," said Markus Allenspach, an analyst at Julius Baer.
The yield on U.S. 10-year Treasuries was back up to 2.13 percent, having sunk below 2.10 percent on Tuesday for the first time since the day after the 2016 presidential election.
In Europe, the pan-European STOXX 600 gained 0.6 percent, recovering nearly all the ground lost in the previous session and banking stocks - which had led the risk-averse move lower on Tuesday - were up nearly 1 percent.
This followed gains in Asia: MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.6 percent while Japan's Nikkei rose 0.7 percent.
Euro zone government bond yields, which fell to fresh lows on Tuesday, edged up on Wednesday as forecast-beating inflation in Spain was expected to be followed by similar data in Germany, defying the euro's recent strength.
In commodities, gasoline hit a two-year high after Hurricane Harvey shut down nearly a fifth of U.S refining capacity, and more closures are expected.
U.S. gasoline futures rose 3.1 percent to $1.8392, bringing gains this week to over 10 percent.
The rise in crude inventories as a result of refinery shutdowns, however, weighed on oil prices.
U.S. crude futures fell 0.6 percent to $46.17 a barrel, after touching a five-week low on Tuesday.
Global benchmark Brent slipped 0.6 percent to $51.67.
Spot gold edged marginally lower to $1,309.39 an ounce on Wednesday. On Tuesday, the precious metal jumped to its highest since Trump was elected U.S. president.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Reporting by Abhinav Ramnarayan and Jemima Kelly, Additional reporting by Nichola Saminather; Editing by Andrew Heavens)