improper encoding in the output of $time

${time %A}, in Spanish locale should return "Sábado", with the a as in á , however it is rendered as something like
S¡bado, which happens when wrong utf-8 encoding is read as iso-8859-1 or similar.

This happened in openbox in Ubuntu 12.04.

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: conky 1.8.1-6
ProcVersionSignature: Ubuntu 3.2.0-29.46-generic-pae 3.2.24
Uname: Linux 3.2.0-29-generic-pae i686
NonfreeKernelModules: wl
ApportVersion: 2.0.1-0ubuntu12
Architecture: i386
Date: Sat Aug 18 13:10:17 2012
InstallationMedia: Ubuntu 12.04 LTS "Precise Pangolin" - Release i386 (20120423)
PackageArchitecture: all
ProcEnviron:
 LANGUAGE=es_PE:es
 TERM=xterm
 PATH=(custom, user)
 LANG=es_PE.UTF-8
 SHELL=/bin/bash
SourcePackage: conky
UpgradeStatus: No upgrade log present (probably fresh install)