With the possibility for allergies, I think the trend is to stay away from wools in favor of acrylics. This is something that should be able to withstand repeated washings. New mothers will throw everything in the washer. Even if they are aware of the special care needs of certain wools, accidents do happen and something may get hidden in a pile of laundry. And accidentally shrunk. My favorite is an acrylic baby sport weight yarn. My favorite brand is Bernat Baby Sport, which is a #3 weight wise. It's lighter than a worsted weight as far as weight and not as warm. You have to be careful not to overwrap a baby and make him/her too warm. I'm hearing that they suspect this may be one of the causes of crib death: being too warm. Most new mothers keep the temp in the house up in winter. They mainly rush a baby from a warm house to a pre-warmed car anyway. So I don't think a heavy weight sweater is all that necessary these days. I like to use a white yarn that will blend with any baby outfit and go for boys or girls.
Welsh corgis are cool.