(Bloomberg) -- Over the longer term, investors would rather be safe than sorry.

Traders favor buying call options over puts on the yen and the Swiss franc, both haven currencies, as global trade tensions escalate and political risk becomes hard to price. Those are the only two currencies among the Group-of-10 where investors prefer calls against the dollar.

“It does appear that the FX options market is pricing in a certain degree of caution. Can’t fault it, really,” according to Ned Rumpeltin, European head of currency strategy at Toronto-Dominion Bank in London. “If we get to a point where these trade wars mean we have to totally reprice our expectations for the Fed, growth, inflation, financial stability, etc, then markets will obviously react.”

One-year, 25-delta risk reversal options are at 138 basis points in favor of yen calls and 88 basis points in favor of the Swiss franc against the dollar. In the same tenor, options signaled the most bearish sentiment for the British pound and the Australian dollar.

The International Monetary Fund joined the chorus of voices this week warning that a trade war could derail the global growth outlook. While these options levels make sense with a looming trade war, it doesn’t mean markets are panicking just yet, said Thu Lan Nguyen, currency strategist at Commerzbank AG.

“Risk-reversal levels are still subdued. If you plot a longer chart, it does not look dramatic,” she said.

To contact the reporter on this story: Anooja Debnath in London at adebnath@bloomberg.net

To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net, Neil Chatterjee

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