ForexLive US wrap: A slightly lower low; no bounce to speak of for euro

EUR/USD falls as low as 1.26615 at the European close; bounces limited to 1.2710 Swiss FinMin: May take until April/May to replace Hildebrand Merkel says Germany may increase ESM contribution  Monti: Market must recognize Italian reforms  Chicago Fed President Evans: US economy needs substantial monetary policy support France denies (again) being warned of imminent downgrade by S&P ECB expected to assume wait-and-see stance at tomorrow's rate setting meeting German 2-yr falls to record low yield of 0.14% Fed's Plosser: Fed must be on guard for inflation; rates may have to go up before mid-2013; questions need for additional stimulus while the economy is improving Fed's Beige Book sees modest to moderate growth across the country Handelsblatt: US may contribute more to the IMF (citing a German official) EU's Van Rompuy: Euro zone entering phase of stagnation; ECB open to new developments and non-standard measures; EUR rate favorable for exports German FinMin says debt talks going well, bankers say they are going badly S&P 500 unchanged at 1292; Milan falls 0.5% US 10-year note falls 5 bp to 1.90%; Italy falls 12 bp to 7.03% WTI falls $1.20 to $101.05; Gold rises $9 to 1642; closes above 200-day avg, resistance EUR/USD fell on comments from Fitch that the ECB must change tact if it is to avoid a cataclysmic collapse of the euro. Also undermining the single currency where persistent rumors that the S&P is set to downgrade France by one-to-two notches any time now... We fell as low as 1.26615 but rebounded owning to protection of 1.2650 barriers. Bounces were limited to the 1.2710 area. Small stops are clustered in the 1.2715/20 area overnight while sell stops are below 1.2650. Strong support stretches from 1.2625 down to 1.2588. Cable blasted through support in the 1.5350/60 area amid fears the UK economy is rapidly losing steam. The BOE is expected to hold steady tomorrow but add to its QE program come February. Perhaps we see a minor pop if they do nothing tomorrow. We close at 1.5325. EUR/CHF found support again in the 1.2105/10 area as the market made a run to test SNB resolve amid the news that it could be months before Hildebrand is replaced permanently. With the ECB seen sidelined tomorrow, US jobless claims and retail sales could be the focus in early US trade tomorrow.