with open(oldfile, 'r') as otxt:
    for rline in otxt:
        if '\xc2\xa3' in rline:
            rline = rline.replace('\xc2\xa3', '\xc2\xa3')
with open(newfile, 'a') as ntxt:
    ntxt.write(rline)
tree = ET.parse(newfile)
Read an xml file in Python