The dollar soared higher against the euro on Wednesday as the prospects of political turmoil in Italy piled pressure on the common currency. The greenback stabilized after wavering following US President Donald Trump's decision to exit a nuclear deal with Iran.

EUR/USD dropped to 1.1826 early in European trade on Wednesday its weakest since Dec. 22. EUR/JPY was down below 129.400 and on its eighth session of losses, after plunging to a six-week low of 129.240 on Tuesday.

The single currency, already weighed by weak economic indicators and widening U.S.-euro zone interest rate differentials, was also hit by political developments in Italy.

USD/JPY climbed towards 110, hitting 109.74 by the time of writing. Cable traded just above 1.3500 following a decline to a four-month low of 1.3485 overnight. The pound has come under significant pressure in recent weeks on expectations the BoE would not, as earlier believed, tighten monetary policy because of a relatively weak economy and as investors piled into a rallying dollar. The Aussie extended its slump to 0.7415.

President Donald Trump announced on Tuesday he will withdraw the United States from the Iran nuclear deal and restore far-reaching sanctions aimed at severing Iran from the global financial system.

Brent crude oil futures traded above $77 per barrel, up more than 2 percent from their last close. WTI Crude oil futures nudged above $71 per barrel.