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Unobtrusive sensors are an important element in wearable systems. One approach in constructing unobtrusive transducers is to use smart materials and then integrate them into smart unobtrusive fabric structures. These types of transducers are called fabric transducers (Fibre-Meshed Transducers or FMTs). Fabrication is carried out via textiles manufacturing processes. In this paper we have discussed three types of FMTs and their applications. Also the discussion is further extended towards real time physiological monitoring system. We have constructed resistive, inductive and capacitive transducers with electronic flatbed knitting technology. The resistive FMTs that were developed inherited with limitations. The inductive FMTs are used for motion and gesture capturing of the kinematical joints of the human body, and capacitive FMTs are used as bio-potential electrodes, which were used to measure ECG. Also we have used the capacitive FMTs as switches. Further we have developed a PDA based wearable physiological monitoring system by using these novel FMTs.