UTF-8 in Cygwin console on 1.7

[Cliff Hones]

Is UTF-8 character output fully supported in the standard Cygwin
console ($TERM=cygwin) under Cygwin 1.7?

On my XP Pro SP3, in a standard Cygwin console (eg as provided by
the default cygwin.bat startup), keyboard input of multi-byte
characters appears correct - eg £ (UK pound) inputs the
UTF-8 sequence C2 A3, and € (euro) inputs E2 82 AC.  However,
on output while C2 A3 correctly displays UK pound, E2 82 AC
displays a question mark.

For example:

  /bin/echo -e \\0302\\0243          # displays UK pound
  /bin/echo -e \\0342\\0202\\0254    # displays ? - not euro

Under mintty, both the above work correctly (ie euro is displayed).

There also appears to be a problem with the NUL character - this
should be completely ignored on output, but is instead displayed
as a space:

  /bin/echo -e A\\0000B              # displays A B, should be AB

Again, with mintty the display is correct.

Is this intended behaviour (I assume not, as 1.7 user guide does
say UTF-8 is supported in console window), is there a problem with
UTF-8 on cygwin console, or is my system somehow misconfigured?

[I was rather surprised to discover that non-X rxvt does not handle
UTF-8 output at all, not that this causes me any great concern.]

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