If you're currently averaging 1200ish, I wouldn't cut them more. If anything, you might actually need more due to the exercise. (I'm about 50 pounds heavier than you, and with NO exercise, I lose at 1500-1600. With exercise, I have to go about 1750 to keep losing at the same rate)
It's not just about the calories either, you've got to watch what you're eating for the calories. If you're working out, you need a fair amount of protein and carbs. Fiber is also GREAT for relieving hunger, and is fairly lo cal. And, I second the thirst suggestion- try upping your water intake and see if that helps.
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