Finally I solved my problem by setting proper locales in .zshrc. Apparently gnome-terminal shows UTF-8 chars only when LANG is set to some UTF-8 charset.
]]>From your screenshot it looks like you are in X: you might want to change your thread title as it is a little misleading.
Check your locale while you are at it.
]]>Zsh problem still remains. I am using oh-my-zsh.
I am out of ideas as to what to do. Please help.
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