Think of yourself at full draw. Now imagine moving your release hand down, while the front of your sight stays on the target. This is what happens when you raise your peep sight. If you bring the back end of the arrow down, and leave the front of it in the same place, it increases the upward angle it's pointing making that arrow impact higher on the target.

I have a VERY difficult time getting 90 meters for fita out of any rig because I have an unusually low peep height of only 5". Most people are 5.5" to 6". Before I get to 90 meters, the fletchings on my arrow contact the scope housing on my sight unless I compromise with a looser anchor point.