The Indian rupee has declined approximately 2% from its June peak, pressured by rising crude oil prices and renewed expectations of US interest rate hikes that counteract dollar inflow support.

Higher energy costs widen India's trade deficit, increasing demand for dollars to pay for imports. Simultaneously, stronger US economic data has fueled speculation that the Federal Reserve may maintain restrictive policy longer, boosting the greenback's appeal.

These dual headwinds have offset portfolio inflows that previously supported the currency. Traders are now watching the Reserve Bank of India's intervention stance and upcoming inflation data for directional cues.