FOREX-Dollar struggles vs euro, Swiss franc nurses losses
* Euro holds near 11-mth high vs USD
* Bernanke warns US still at risk from political gridlock over deficit
* Euro/Swiss franc draws breath after strong rally
SYDNEY, Jan 15 (Reuters) - The dollar languished at 11-month lows against the euro on Tuesday after comments from the head of the Federal Reserve suggested the central bank was in no hurry to withdraw monetary stimulus from the world's biggest economy.
Speaking at the University of Michigan, Ben Bernanke said the recovery was still fragile and warned the economy was at risk from political gridlock over the deficit.
Earlier, the president of the San Francisco Federal Reserve Bank, John Williams, said he expected the central bank's bond buying would be needed "well into the second half of 2013."
"Overall, these remarks do not change our view that QE3 will continue into at least the end of 2013 as the recovery remains moderate, while we also see downside risks for the economy stemming from the debt ceiling uncertainty," said Vassili Serebriakov, strategist at BNP Paribas.
The euro last traded at $1.3375, having risen as far as $1.3404 in New York. Immediate resistance was seen around $1.3490, a level that had capped the currency last year.
Investors also sold the greenback against higher-yielding currencies such as the Australian dollar, which rose to $1.0565 from lows of $1.0521 on Monday. The Aussie was within easy reach of a four-month peak just shy of $1.0600 set last week.
The Fed's stance stood in contrast to a more upbeat European Central Bank, which recently said the euro zone economy will recover later in 2013 and there are already signs of stabilisation.
That has helped the single currency outperform many of its peers over the last few sessions. One standout performance on Monday was the euro's 1.2 percent rally against the Swiss franc , taking it well above 1.2300 francs for the first time since December 2011.
"It had lagged the rise in EUR/USD and is now busy gapping aggressively higher and taking out layer after layer of strikes. It is happening very quickly," said Sebastien Galy, strategist at Societe Generale.
"Market makers are panicking leading EUR/CHF vols to move explosively higher in the front end. The next layer of strikes is reportedly between 1.24 and 1.25, though looking at price action it seems that we hit a layer of strikes every 20 pips or so."
Against the yen, the euro scaled a fresh 20-month peak around 120.13. It last stood at 119.71, having surged more than 5 percent in less than a week.
Part of the euro's explosive move against the yen reflected expectations for the Bank of Japan will be forced to take bold action to jump-start a sluggish economy.
The BOJ is under unrelenting pressure from newly elected Prime Minister Shinzo Abe to beat deflation once and for all.
That has allowed the dollar to outperform the yen, pushing it to 2-1/2 year highs near 90.00 yen, where options barrier are reported to be lurking.
There is little in terms of major economic news out of Asia on Tuesday. In Europe, consumer inflation data from Germany, Italy, Spain and Britain are on offer, followed by U.S. retail sales.