(Adds details from report, analyst comments, updates markets)
WASHINGTON, July 18 (Reuters) - U.S. import prices fell for a second straight month in June amid further declines in the cost of petroleum products, suggesting inflation could remain benign in the near term.
Import price pressures are, however, likely to pick up given the recent weakness in the dollar, which has declined 6.1 percent in value against the currencies of the United States' main trading partners this year.
"The focus should be on the dollar," said John Ryding, chief economist at RDQ Economics in New York. "If a stronger dollar represented tighter financial conditions and a disinflationary impulse, a weaker dollar implies looser conditions and an inflationary impulse."
The Labor Department said on Tuesday that import prices decreased 0.2 percent last month after falling 0.1 percent in May. In the 12 months through June, import prices increased 1.5 percent. That was the smallest gain since last November and followed May's 2.3 percent increase.
The year-on-year increase in import prices has slowed sharply since posting 4.7 percent in February, which was the biggest advance in five years.
Import prices excluding petroleum edged up 0.1 percent after being unchanged the prior month. They have stabilized since falling last October, reflecting the dollar's depreciation, and increased 1.4 percent in the 12 months through June.
The report followed data last week showing consumer prices unchanged in June and the annual CPI rate increasing 1.6 percent - the smallest rise since October 2016.
The dollar has been hurt by the benign inflation outlook and diminishing expectations of a fiscal stimulus from Washington after Republicans in the U.S. Congress struggled with healthcare reform. Political scandals surrounding President Donald Trump are also seen impeding his pro-growth agenda.
The dollar fell to a 10-month low against a basket of currencies on Tuesday, while prices for U.S. government bonds rose. Stocks on Wall Street were trading down.
Low oil prices are largely curbing both domestic and imported inflation pressures. Other factors such as declining prices for mobile phone services have also contributed to pushing inflation below the Federal Reserve's 2 percent target.
Fed Chair Janet Yellen told lawmakers last week that the recent ebb in inflation was partly the result of "a few unusual reductions in certain categories of prices" that would eventually drop out of the calculation.
"Expectations for a weakening U.S. dollar should pressure nonfuel import prices higher, supportive to the Fed's projection that inflation will gradually climb in the second half of the year," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
Persistently low inflation will likely have an impact on the timing of a third interest rate increase this year from the U.S. central bank, which most economists expect would be in December.
Last month, prices for imported petroleum fell 2.2 percent after decreasing 1.2 percent in May. Imported petroleum prices have not risen since gaining 0.8 percent in February.
Prices for imported capital goods rose 0.2 percent, the largest increase since May 2014, while motor vehicle prices fell 0.2 percent. The cost of imported food increased 0.9 percent.
The report also showed export prices dropped 0.2 percent in June as falling vegetable, soybeans and fruit prices weighed on agricultural exports, after falling 0.5 percent in May.
They rose 0.6 percent year-on-year, the smallest gain since prices started rising in December, curbed by lower export prices for soybeans, fruit and corn. Export prices gained 1.5 percent in the 12 months through May.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)