LONDON, Jan 19 (Reuters) - The euro fell to a day’s low against the dollar and a 10-day low against sterling on Thursday, while European stocks hit a day’s peak after European Central Bank President Mario Draghi played down a recent rise in euro zone inflation.

The euro dropped to as low as $1.0603 and to 86.26 pence against the pound before making a partial recovery.

Europe’s Stoxx 600 share index moved out of the red as Draghi spoke too and went as high as 363.83 points. Euro zone bond yields and forward money market rates, which move inverse to prices, also edged off the day’s highs.

Benchmark Bund yields were still up 3 basis points at 0.31 percent having earlier been at a 1-month high of 0.33 percent.

Draghi’s comments also came alongside better-than-expected U.S. economic data, which boosted the dollar across the board. (Reporting by Marc Jones)