Due to its significance, the field of exchange rates is a highly researched area in economics. Until the introduction of the euro on January 1, 2023, the exchange rate of the Croatian kuna to the euro served as an anchor of monetary policy, ensuring the central bank's goal of price stability. Despite being a monetary policy anchor, the central bank was not the sole entity capable of influencing it. Given the multitude of variables affecting the formation of exchange rates predicting exchange rate movements is inherently challenging. Various models have been developed to address this complexity, differing in the number of variables considered and the definition of their interdependencies. Researchers have found that standard macroeconomic theories do not accurately reflect the actual process by which traders determine exchange rates. Consequently, a microstructure approach has been established, analyzing how information available to participants in the foreign exchange market influences the movement of spot exchange rates. This doctoral thesis includes a descriptive analysis illustrating the graphical correlation between order flow and movements in the EUR/HRK exchange rate. Subsequently, an econometric analysis was conducted, confirming the impact of order flow and macro variables on the movement of the EUR/HRK exchange rate. The study also explores the forecasting possibilities of order flow for the kuna's exchange rate against the euro, demonstrating that part of the exchange rate movement can be explained based on order flow data from the previous day.