Mouse does not interact with XFCE

I run XFCE in Archlinux and I have had my mouse (and/or XFCE) behaving weirdly for a couple of days.

The mouse works fine when I first start XFCE. I can interact normally with UI features. However, when I launch an application (i.e. Firefox), the mouse pointer will stop to interact with the UI elements of XFCE although it still works within the application. For example, I can click on bookmarks and the navigation buttons of Firefox, but clicking on the panels and the window frame buttons will not be registered until I close the application with Alt-F4.

I have looked around in the forums but I could not find any related issues. Could anybody help me see where to start troubleshooting?

Thanks!

[EDIT] But now for example it even refuses to work within Firefox. Unplugging and replugging it makes it interact again with Firefox but not with XFCE. However, if I completely unplug the mouse, I can use the trackpad successfully both in XFCE and in Firefox!

May it be some issue with the drivers? Note that (re)installing xf86-input-mouse does NOT solve the issue.