Create a file utf8.txt. Ensure the encoding is UTF-8 (no BOM). Set its content to €
In cmd.exe:
type utf8.txt > out.txt
Content of out.txt is €
In PowerShell (v4):
cat .\utf8.txt > out.txt
or
type .\utf8.txt > out.txt
Out.txt content is €
How do I globally make PowerShell work correctly?
Note: This answer is about Windows PowerShell (up to v5.1); PowerShell (Core) 7+, the cross-platform edition of PowerShell, now fortunately consistently defaults to BOM-less UTF-8 on both in- and output.
Windows PowerShell, unlike the underlying .NET Framework[1] , uses the following defaults:
on input:[2] files without a BOM (byte-order mark) are assumed to be in the system's default encoding, which is the legacy Windows code page ("ANSI" code page: the active, culture-specific single-byte encoding, as configured via Control Panel).
on output: the > and >> redirection operators produce UTF-16 LE files by default (which do have - and need - a BOM).
File-consuming and -producing cmdlets do usually support an -Encoding parameter that lets you specify the encoding explicitly.
Prior to Windows PowerShell v5.1, using the underlying Out-File cmdlet explicitly was the only way to change the encoding.
In Windows PowerShell v5.1+, > and >> became effective aliases of Out-File, allowing you to change the encoding behavior of > and >> via the $PSDefaultParameterValues preference variable; e.g.:
$PSDefaultParameterValues['Out-File:Encoding'] = 'utf8'.
For Windows PowerShell to handle UTF-8 properly, you must specify it as both the input and output encoding[3] , but note that on output, PowerShell invariably adds a BOM to UTF-8 files.
Applied to your example:
Get-Content -Encoding utf8 .\utf8.txt | Out-File -Encoding utf8 out.txt
To create a UTF-8 file without a BOM in PowerShell, see this answer.
[1] .NET Framework uses (BOM-less) UTF-8 by default, both for in- and output.
This - intentional - difference in behavior between Windows PowerShell and the framework it is built on is unusual. The difference went away in PowerShell [Core] v6+: both .NET [Core] and PowerShell [Core] default to BOM-less UTF-8.
[2] This applies to Get-Content and notably also to source code read by the PowerShell engine. Unfortunately, the default behavior varies across cmdlets; for instance, Import-Csv assumes UTF-8. For an overview of the default character encoding used by all built-in cmdlets in Windows PowerShell, see the bottom section of this answer.
[3] Cmdlets such as Get-Content do, however, automatically recognize UTF-8 files with a BOM, and so does the PowerShell engine when reading source code.