Traders report talk that it is China buying dips in the 1.2540/50 level. Makes sense. If they are protecting 1.2500 they may want to give themselves a bit of breathing room. We bounced from 1.2552 lows on the latest pullback.
With all of the official talk that China will soon appreciate the Yuan, what China is actually doing should not surprise anyone. In order to keep their domination on global trade, they would need to prop up the USD and the EUR, thus enabling their currency to depreciate. The more the Euro and the Dollar go down (devalue), the more expensive Chinese exports become, or at least the less real profits they make, even with a peg.