Dollar Higher on Greek Stumbling Blocks

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (BBH FX Strategy) -- The dollar is trading higher against most of the majors and EMs on concerns over the Greek deal as European Union finance ministers demand more commitments from Greece.

The EuroStoxx 600 is off it lows but down 0.4%, with bank shares down 1.7% S&P futures are also lower.

The euro headed back to levels near 1.320 after it stalled out around 1.330 on Thursday. Near-term support is seen near 1.317 followed by the recent low of 1.303. Sterling is the only major currency advancing against the dollar, up marginally to 1.583, amid UK corporate demand related to a dividend payment. The Australian dollar is among the worst performers on the day against the dollar, down 1%, following the Reserve Bank of Australia's statement on monetary policy.

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We see Greece risks rising as brinksmanship continues. The Greek government gets its coalition partners to OK the austerity measures demanded by the Troika, but then Finance Minister Venizelos goes to the eurozone finance ministers meeting in Brussels and is basically given an incomplete, sees aid withheld, and then told to go home to Athens and finish his homework.

Another emergency finance ministers meeting is reportedly set for Feb. 15, with officials saying must detail further budgetary measures totaling 325 million euros by then.

Eurozone officials are playing a dangerous game, as opposition to austerity in Greece is surely intensifying, as evidenced by the resignation of the Deputy Labor Minister Thursday and by another socialist MP today. The poor Greek economic backdrop only makes it tougher to stick with austerity to meet fiscal targets.

Thursday, it was reported that the unemployment rate rose to a cycle high 20.9% in November from 18.2% in October, and December IP fell -11.3% year over year vs. -7.8% in November. Greek unions will stage a 48-hour strike Friday and Saturday.

Despite all the deadlines that have come and gone in recent weeks, we believe Greece and the eurozone are entering a critical phase right now and have less and less wriggle room ahead of the March 20 bond maturing.