Description of problem:
I have machine which has non latin domain name in hostname and my $PS1 include \h and the hostname is displayed in Pune encoding instead of proper Unicode.

[root@xn--luouk-k-z2a6lsyxjlexh ~]# hostname
xn--luouk-k-z2a6lsyxjlexh.lab.FILTERED
[root@xn--luouk-k-z2a6lsyxjlexh ~]# host xn--luouk-k-z2a6lsyxjlexh.lab.FILTERED
žluťoučký-kůň.lab.XXX has address 10.34.XX.XX
[root@xn--luouk-k-z2a6lsyxjlexh ~]# echo $PS1
[\u@\h \W]\$

Version-Release number of selected component (if applicable):
# rpm -q bash
bash-4.2.45-1.fc18.x86_64

How reproducible:
always

Steps to Reproduce:
1. created DNS record for machine with non latin character
2. set PS1=\h

 
Actual results:
hostname is in Pune encoding:
xn--luouk-k-z2a6lsyxjlexh

Expected results:
I expect it decoded from Pune to Unicode
žluťoučký-kůň