Convert unicode escape sequences to unicode in a file

Tue Jan 11 15:53:02 EST 2011

I have a file that has unicode escape sequences, i.e., 
J\u00e9r\u00f4me
and I want to replace all of them in a file and write the results to a new file. The simple script I've created is copied below. However, I am getting the following error:
UnicodeEncodeError: 'ascii' codec can't encode character u'\xe9' in position 947: ordinal not in range(128)
It appears that the data isn't being converted when writing to the file. Can someone please help?
Thanks,
Jeremy
if __name__ == "__main__":
 f = codecs.open(filename, 'r', 'unicode-escape')
 lines = f.readlines()
 line = ''.join(lines)
 f.close()
 utFound = re.sub('STRINGDECODE\((.+?)\)', r'1円', line)
 print(utFound[:1000])
 o = open('newDice.sql', 'w')
 o.write(utFound.decode('utf-8'))
 o.close()