Australian dollar holding up despite taper talk The Australian dollar has remained resilient despite expectations that strong US jobs data would weaken the currency as stimulus reduction expectations are brought forward. The currency fell to a new three-month low of 89.89 US cents early Saturday morning, after official US data showed that 203,000 jobs were created last month, above economists" forecasts of about 180,000. But the dollar rebounded shortly after and was mostly trading above 91 US cents today, boosted in part by new Chinese figures on producer prices and inflation. It was buying 91.20 US cents about 1pm. The US unemployment rate fell to a five-year low of 7 per cent, data released on Saturday showed. The reports followed a series of improving economic indicators, and increased the possibility the Federal Reserve would trim its $US85-billion-a-month bond-buying program as soon as this month. Currency strategists said the lack of a sustained decline in the Australian dollar could have been a result of already heightened expectations that US employment numbers would be stronger than expected following encouraging data earlier last week. At the same time, financial markets were becoming more accepting of the Fed's message that the tapering of asset purchases would not necessarily lead to a tightening of monetary policy, Deutsche Bank currency strategist John Horner said. This meant the impact of tapering on risk assets such as the Australian dollar would not be as pronounced as when markets were readying for a wind-back of stimulus in September. "The Fed has been very successful in disassociating the concept of tapering its bond purchases from the actual tightening of policy and the raising of interest rates," Mr Horner said. The performance of risk markets [and] equity markets that we saw after the payrolls on Friday gave a greater confidence that tapering will be better managed and perhaps have less of a negative impact than the initial talk of it did in May and June. Expectations that US interest rates would remain lower for a longer period of time, as flagged by Fed chairman Ben Bernanke last month, meant any strength in the US dollar as tapering starts could be short-lived, Rochford Capital's director Thomas Averill said. "The RBA is unlikely to cut in the next four or five months and even if tapering does happen in the US, there's still not going to be much yield in holding US dollars until probably late into 2015," Mr Averill said. [The rise in the US dollar when tapering starts] might be violent at the time, but it will ultimately unwind when the market normalises and realises that despite the fact that asset purchases have fallen off, in actual fact, real interest rates in the US are probably going to stay close to negative for a very long time. The Australian dollar has benefited from the Federal Reserve's quantitative easing program, and analysts expect some of its gains to be unwound as the central bank cuts back on its monthly asset purchases. The third-round of the program started in September 2012 and has boosted risk assets such as emerging markets and commodity currencies. The local currency has also weakened against the euro and the sterling pound to levels not seen since mid-2010. Mr Averill said he expected the sterling pound to continue strengthening as inflation becomes a concern in the UK. House prices are going to be more of an issue there, so I think you can see interest rates rise in the UK," Mr Averill said.