Today I learned something about file encodings in vim. When your terminal is UTF-8 but Vim insists on treating the file you are opening as latin-1, here is what to do: Setting fileencoding on the already opened file will not work, it will only try to convert the file (i.e. the wrongly interpreted UTF-8 sequences) to UTF-8. Don't do this!
The solution is to reopen the file using
or specify the ++enc parameter when opening the file from inside vim. The more you know.