They are influenced by base lending rates, which are set by central banks in response to changes in the economy. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. The pair bounced from lows of 0.5845 in the early European session but remains capped below Monday’s highs at 0.5671. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.