An RFID transponder having an antenna for receiving an RF signal including an amplitude modulated downlink data signal, and a demodulating stage coupled to the antenna for receiving a derived RF signal which is derived from the received RF signal. The demodulating stage has a first filter for extracting a field strength signal component from the derived RF signal and a second filter for extracting the modulated downlink data signal component from the derived RF signal. Further, a demodulator is coupled to the second filter to receive the modulated downlink signal for demodulating the modulated downlink data signal component and coupled to the first filter to receive the field strength signal such that the demodulator is adapted to vary a demodulation sensitivity parameter in response to the field strength signal.