Yes diabetes can affect the baby, especially if the numbers run too high and are not controlled well. But with good eating habits, exercise weight watching and close monitoring, the risk is reduced. For most people a normal blood sugar taken in the morning before eating is 70-100. Your doctor may have different goals for you, but typically between 70-120 is a good range in which to keep your blood sugar. Please follow-up with the doctors to see what they require.
Blessings on your baby!