Can i pick off my babys peeling skin?

No: Not necessary to do so, with moisturizers, the dead skin will come off by itself.

No: Just leave it alone. It will simply fall off on it's own. If you are worried that the skin is so dry that it may be getting cracked in certain locations (wrists or ankles in particular right after birth), try applying some vasoline or aquaphor ointment. In due time, the old (dead skin) will simply fall off as you bathe your baby and the new skin underneath will be nice and soft.